(Reuters) – A jump in jobless claims reported Thursday, along with weaker-than-expected wholesale price pressures, have for now wiped out any lingering trader expectations that the Federal Reserve will raise interest rates again in June, and bolstered bets on rate cuts to come.

Unemployment insurance claims rose last week to the highest level since October 2021, and the producer price index rose 2.3% from a year earlier, the smallest gain since January 2021, the report showed.

Futures contracts tied to the Fed’s policy rate now reflect no chance of an interest rate hike in June, and indeed a small chance the Fed will cut rates by a quarter of a percentage point from the benchmark’s current 5%-5.25% range.

“Evidence of cooling demand for labor will allow the FOMC to refrain from raising rates at the June meeting,” Oxford Economics’ Nancy Vanden Houten wrote in a note.

Rate futures contracts point to trader expectations for the Fed to start interest-rate cuts in September.

Less than 48 hours ago, traders had seen as much as a 25% chance that the Fed would raise rates for an 11th straight time at next month’s meeting. Traders erased most of those bets Wednesday, after consumer inflation in April was reported to have risen 4.9% from a year earlier.

After Thursday’s data, the CME FedWatch Tool shows no chance of a rate hike, and a 3% chance seen of a rate cut in June.

Fed policymakers have about five more weeks of data to parse before their next meeting, and have said they intend to sift through it carefully before making their decision.