The odds of further interest rate cuts increased after the Federal Reserve's latest moves, and after policy setter said financial market stress, tight credit and housing weakness was likely to continue over the next few quarters.

July fed funds futures rose 0.05 points to 98.04, which implies a 16% chance that the Fed's target for overnight rates will be at 1.75%, down from the current rate of 2%, after the next policy setting meeting (June 24/25).

Late Tuesday, the odds of a 1.75% fed funds rate in July were at 4%.

Earlier, the Fed cut its target for overnight and discount rates by 25 basis points each to 2% and 2.25%, respectively. The Fed said in its statement that its moves to date "should help promote moderate growth" over time. Tomi Kilgore.

Source: Reuters UK