US inflation slowed to a less than expected 3.1 per cent in January, according to government data released on Tuesday. Financial markets had been anticipating the Federal Reserve to cut interest rates in May. However, investors have now tempered their expectations in response to Tuesday’s announcement.
According to analysis by the Financial Times, the probability of a rate cut in May, implied by Tuesday’s US futures markets, decreased from 50 per cent to 30 per cent, while the likelihood of a cut in March is negligible.
