Traders bet on Fed rate cut by September

March 13 (Reuters) - The ‌Federal Reserve ​will ​probably next cut interest rates in September, traders bet on Friday ‌after government data showed inflation by the ⁠Fed's targeted measure wasn't quite as hot as feared ‌at the start of ‌the year.

Before the data, which showed a 2.8% year-on-year rise in the personal consumption ​expenditures price index in January, the betting had been for a first Fed ⁠rate cut in October. The Fed targets 2% inflation.

In the ​two weeks since the Iran conflict set off a surge in oil prices, ​traders had pushed bets ‌on a first Fed rate cut to as late as December. ⁠Oil prices for now remain key to expectations around the Fed, which is universally expected to ⁠leave rates on hold when central bankers meet in ​Washington next week.

"Inflation remains elevated, sticky and with the possibility of energy prices eventually moving into the ‌pipeline, the Fed is likely to stay on hold for a ‌longer period of time,” said Spartan Capital ⁠Securities chief market economist ‌Peter Cardillo.

(Reporting by ​Ann Saphir, Lucia Mutikani, Stephen Culp; Editing by Joe Bavier and Chizu ‌Nomiyama )

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