U.S. core inflation annual rate hits a four-year low, market slightly increases bets on the Federal Reserve cutting interest rates in April

U.S. inflation last month was 2.7%, in line with market expectations, but core inflation rose 0.2% year-on-year, slightly lower than expected, with an annual rate of 2.6%, the lowest in four years.

According to a report by Reuters, interest rate futures show that the market has increased expectations for the Federal Reserve to cut rates earlier, with the probability raised from 38% to about 40% for a cut in April this year. However, the market still generally expects the Federal Reserve to cut rates again in June this year, by which time current Chairman Jerome Powell will have left office.

The unexpected decline in the U.S. unemployment rate has prompted major banks to adjust their expectations for Federal Reserve rate cuts. Morgan Stanley, Barclays, and Citigroup have all delayed their predictions for the Federal Reserve's rate hikes this year, with JP Morgan even predicting that the Federal Reserve will not cut rates this year and will resume rate hikes next year