The wind has changed! Internal divisions within the Federal Reserve have intensified, and traders are urgently reducing their rate cut bets

Traders are lowering their expectations for the Federal Reserve's rate cuts in the coming months, reflecting increasing divisions within the Fed. Market participants are betting that the Fed will only cut rates by 25 basis points in 2025, with expectations for the neutral rate being higher than market expectations. The differing views among Fed officials have led traders to adjust their expectations for the magnitude of rate cuts. Newly appointed Governor Stephen Milani advocates for a 125 basis point cut, while Atlanta Fed President Bostic remains cautious about inflation. Overall, market expectations for future interest rate trends have become more cautious