Jan 31 (Reuters) - Traders on Wednesday trimmed bets the Federal Reserve will begin a series of interest-rate cuts as soon as March, and now see a May start to rate cuts as about as likely.
The U.S central bank ended its first policy-setting meeting of the year with a decision to hold the policy rate in the current 5.25%-5.5% range, but said it "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."
After the release of the statement, which also removed a previous reference to further policy tightening, traders scaled back expectations for policy rate reductions through the year, with the Fed seen likely to deliver five quarter-point rate cuts by the end of 2024 and only about even odds of a sixth rate cut. Earlier in the day a sixth rate cut was nearly fully priced in.
"The good news is we can forget about any more tightening," said Art Hogan, chief market strategist at B. Riley Wealth. "The bad news it's 'when', not 'if', they're going to cut rates, and that 'when' has been pushed out to what had been the fringes of consensus." (Reporting by Ann Saphir with reporting by Noel Randewich Editing by Chris Reese and Nick Zieminski)
