Traders Maintain Fed's 2026 Two-Rate Cut Bet; Policy Minutes Fail to Change Market Expectations

Although Federal Reserve officials have reached a consensus on a rate cut in December and hinted at further easing in the future, this has not prompted traders to significantly raise their expectations for declining borrowing costs. The market still leans toward expecting two rate cuts this year, rather than the three initially anticipated in early December.
While policymakers emphasize concerns about labor market risks, traders are likely waiting for subsequent data to validate these worries.