Fed Policy and Interest Rate Expectations💱 Forex

Fed Policy in Flux: Rate Cut Bets Rise Amid Softening US Data

February 11, 2026, 12:02 PM156 words6 sourcesAI-Generated · Reviewed by editorial team
Fed Policy in Flux: Rate Cut Bets Rise Amid Softening US Data

Photo: Pexels / Nataliya Vaitkevich

Recent economic data is increasingly influencing expectations regarding Federal Reserve policy, with a growing consensus that interest rate cuts are likely in the near future. While Fed official Beth Hammack maintains that inflation remains too high, softer US retail sales and cooling labor demand, as highlighted by MUFG, are bolstering bets for a June rate cut and further easing through 2026. DBS Research suggests that US Treasury resilience indicates markets have already priced in weaker data, potentially limiting the reaction to upcoming CPI releases. Concerns about US economic growth and diversification efforts by Chinese financial institutions away from US government bonds are also contributing to USD weakness, potentially benefiting the EUR/USD. The USD/JPY pair has already slipped below 155, signaling a possible trend reversal. However, some analysts believe rates markets may still be underpricing the potential scale of Fed cuts. Overall, the market anticipates a weaker dollar as expectations shift towards a more dovish Fed stance.

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This article is based on analysis of 6 source articles from our news database.

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    FXStreet·fxstreet.com·
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    InvestMacro··investmacro.com·
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