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Hedge funds cut July Fed hike expectations after softer US inflation

The repricing suggests market pricing moved away from a July rate increase following the weaker inflation result.

Reported · Written up by our desk · Economy

Soft US inflation data has triggered a broad reset in interest rate expectations, prompting hedge funds and other fixed income investors to scale back their assumptions about whether the Federal Reserve will raise rates at its July meeting, according to reporting by Bloomberg.

Hedgeweek said the weaker-than-expected inflation reading led to a sharp repricing across rate markets, reflecting reduced odds for a July hike as traders reassessed the outlook for monetary policy.

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