(Reuters) – Traders on Thursday added to bets the U.S. Federal Reserve’s next rate cut will be smaller than the one it delivered on Wednesday, after economic data showed an unexpected drop in unemployment insurance claims.
Interest-rate futures contracts now price in about a 30% chance that the Fed, which cut rates by half a percentage point on Wednesday, will deliver a second cut of the same size in November. The market-based probability of a quarter-point rate cut in November is now about 70%, up from around 65% before the data.
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