• Investors ramped up bets that the first rate cut would come in June after Wednesday's Fed meeting.

• CME's FedWatch Tool showed expectations of a June cut hit 70%, up from 55% earlier in the day.

• The Fed's dot plot forecasts three cuts in 2024.

Market expectations for a June rate cut spiked Wednesday following the Federal Reserve's decision to hold interest rates steady and its nod to three rate cuts still in the cards for 2024.

Federal Open Market Committee members voted unanimously to keep rates within the 5.25% to 5.5% range. The decision was in line with expectations and marked the fifth consecutive meeting that saw the central bank's benchmark rate unchanged.

The Fed's dot plot indicated that policymakers still anticipated three 25-basis-point rate cuts in 2024, though the median forecast for the benchmark rate climbed from 3.6% to 3.9%. The Fed also anticipates three rate cuts in 2025.

After the announcement, CME's FedWatch Tool showed traders' expectations for a cut in June ramped up to nearly 70% from 55% earlier in the day before the decision.

In his press conference, Fed Chair Jerome Powell maintained that the central bank would continue to be data-dependent as the economy remained on solid footing and that the Fed was still "strongly committed" to achieving its 2% inflation target.

Powell added that the Fed would reach that target at some point, even as the road had been bumpy.

February's consumer price index came in at 3.2% year over year, hotter than expected.

"We make decisions meeting by meeting, and we didn't make any decisions on future meetings. Things can happen during an intermeeting period," Powell said, adding: "The committee wants to see more data that gives us higher confidence that inflation is moving toward 2%."

Policymakers also raised their outlook for long-term rates. The median estimate ticked up from 2.5% to 2.6%, which nodded to the higher-for-longer narrative, which has increasingly become consensus.

Whitney Watson, Goldman Sachs Asset Managements' co-chief investment officer of fixed income and liquidity solutions, said the firm maintained its prediction for the Fed to begin cutting rates in the summer.

"The slight rise in the longer-run policy rate forecast is both negligible and noteworthy," Watson said after the FOMC decision. "It is negligible because market expectations are already much higher, but noteworthy as it reinforces the market's recent perception that the rate-cutting cycle may be shallower than initially anticipated. Overall, despite recent bumps in the inflation road, major central banks remain on track for rate cuts in the coming months, and high-quality fixed-income bonds stand to benefit."

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