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A 25-basis-point rate cut is now penciled in for June after consumer prices cooled to 2.4% year-over-year — the softest inflation print since 2024 and the clearest green light the Fed has handed markets in months.
The dot plot, long a Rorschach test for rate-watchers, finally said what traders needed to hear: the trajectory holds. --- The number that moved the needle 2.4%. That is the figure doing the heavy lifting.
Year-over-year CPI at that level strips away much of the Fed's remaining cover for staying put. Policymakers had been threading a needle between a still-warm labor market and a consumer showing early signs of fatigue.
June's meeting now has a working assumption baked in, and the bond market is pricing accordingly. What the dot plot confirmed Traders had already positioned for two cuts across 2026.
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