Inflation Rises Faster than Expected; Traders Now Betting on Multiple Fed Rate Cuts This Year

• Inflation increased 0.4% in January, more than double the monthly rate needed to reach Fed's 2% goal

• Year-over-year inflation rate ticked down slightly to 2.8% from 2.9% in December

• Traders are pricing in a 67% chance of a Fed rate cut in June following the inflation data, up from 60% previously

• Traders are betting on 2 additional rate cuts by end of year, which would bring the policy rate down to 4.5%-4.75%

• Boston Fed President said waiting for clear downward inflation trend before cuts sets too high a bar, but more evidence needed