NEW YORK (Reuters) - Futures traders have reduced bets on how much the Federal Reserve will cut rates this year to the lowest level since October, LSEG data showed on Monday, amid evidence of continued strength in the U.S. economy.

Fed funds futures contracts for December on Monday reflected expectations of around 60 basis points in rate cuts this year, compared to some 150 basis points that had been priced at the start of 2024. The prospect of a first 25 basis point cut in June stood at 49%, down from 57% a week ago, CME Group (NASDAQ:CME) data showed on Monday.

Expectations for how deeply and how soon the Fed will cut rates have shifted rapidly over the last few months, as investors grow increasingly doubtful that policymakers will be able to lower borrowing costs without sparking an inflationary rebound in a strong economy. The Fed has projected it will cut rates by 75 basis points this year.

Treasury yields, which are swayed by interest rate expectations, have moved higher as a result. The benchmark 10-year yield, which moves inversely to bond prices, hit its highest level since November on Monday. Data on Friday showed unexpected strength in the labor market, the latest in a series of reports reflecting stronger-than-expected growth.

In January, policymakers introduced language saying they would keep the policy rate in its current 5.25%-5.5% range until they have "greater confidence" that inflation is headed to the Fed's 2% goal.

The combination of strong data and limited progress on inflation in the last couple of months has amplified the calls among top officials - including Chair Jerome Powell - to be "patient" as they approach the decision on when to cut rates.

Investors will be closely watching the Consumer Price Index for March, which will be released on Wednesday, to further assess the chances of rate cuts this year.