Stocks closed higher Wednesday, extending the Santa Claus rally for another day. The main benchmarks have been rallying in recent weeks on hopes that easing inflation will encourage the Federal Reserve to start cutting interest rates early next year – and that momentum continued today.
According to CME Group, futures traders are pricing in a 74% chance for a quarter-point rate cut at the March Fed meeting. Markets also assign a 62% probability to the federal funds rate being an entire percentage point lower in July from its current range of 5.25-5.5%.
