That is, they expect the Fed to signal caution about cutting rates further in 2026, even as they deliver one more in 2025.
Interest-rate futures showed Tuesday morning that traders see a 32% chance that the Fed cuts rates at least three times in 2026, according to CME Group, down from 56% shortly before Thanksgiving. The chances of one or no cuts have ticked up to 38% from 18% over that stretch.
That shift has helped drive up U.S. Treasury yields in recent days, with the yield on the 10-year note approaching 4.2%.
