The U.S. public’s near-term inflation expectations were largely stable in January, a Federal Reserve Bank of New York report found, as respondents to the survey also predicted a notable softening in future spending plans.

This week’s forthcoming Consumer Price Index report could show easing year-on-year inflation, increasing the potential for Fed interest rate cuts in May or June 2025.

The unexpected rise in price pressures prompted futures traders to increase the odds that the Federal Reserve will hold the benchmark rate at its current range beyond May.