The Federal Reserve may not cut interest rates this year

On January 13, U.S. interest rate futures no longer fully priced in expectations that the Federal Reserve will cut interest rates even once this year, after Friday's strong monthly employment data underscored the resilience of the U.S. economy. Interest rate futures showed that traders expect the Federal Reserve to cut interest rates by only 24.26 basis points by December this year, compared with about 43 basis points before the employment data was released. At present, traders are increasingly not betting on how much the Federal Reserve will cut interest rates from the current 4.25-4.50% interest rate range, which in turn has boosted the exchange rate of the dollar against most other major currencies. The sell-off in US Treasuries this month, on the back of rising inflation and borrowing costs expectations, has pushed up yields on 10-year Treasuries and reinforced investor confidence that the Federal Reserve may have less room to cut interest rates than previously thought.