Market participants expect little change in the federal funds rate target range this year

The minutes of the Federal Reserve meeting showed that market participants do not expect much change in the target range of the federal funds rate this year. The implicit probability of a rate hike in the first quarter of 2027 is approximately 30%. The survey shows that there will be two 25 basis point rate cuts in the next year, and the rate cuts are expected to be later than the previous survey, in the third or fourth quarter of 2026 and the first quarter of 2027 respectively.