Markets are nearly certain the Federal Reserve next month will take another step down in the pace of its interest rate increases.

Pricing Wednesday morning pointed to a 94.3% probability of a 0.25 percentage point hike at the central bank’s two-day meeting that concludes Feb. 1, according to CME Group data. If that holds, it would take the Fed’s benchmark borrowing rate to a targeted range of 4.5%-4.75%.

While the probability is little changed since late last week, economic data Wednesday helped solidify the idea that after a succession of aggressive hikes — four consecutive three-quarter point increases in 2022, at one point — the Fed is ready to take its foot off the brake a bit more.

The producer price index fell 0.5% in December while retail sales were off by 1.1%. Both indicate that Fed hikes are pulling down inflation and slowing consumer demand.

“We are changing our call for the February FOMC meeting from a 50 [basis point] hike to a 25bp hike, although we think markets should continue to place some probability on a larger-sized hike,” Citigroup economist Andrew Hollenhorst wrote in a client note.

“Softer PPI will join with slower consumer price and wage inflation to most likely push the Fed toward a 25bp increment,” he added.

A basis point is 0.01 percentage point.

St. Louis Fed President James Bullard said Wednesday morning that he would prefer that policymakers stay on a more aggressive path.

The rate-setting Federal Open Market Committee, where Bullard is a nonvoter this year, approved a 0.5 percentage point increase in December after the succession of 0.75-point moves.

“Why not go where we’re supposed to go, where we think the policy rate should be for the current situation?” Bullard said during a roundtable talk hosted by The Wall Street Journal. “Then, once you get there you can say, ‘OK, now we’re just going to react to data.'”

However, Philadelphia Fed President Patrick Harker last week said he backs a slowdown.

“I expect that we will raise rates a few more times this year, though, to my mind, the days of us raising them 75 basis points at a time have surely passed,” Harker, an FOMC voter, said Thursday. “In my view, hikes of 25 basis points will be appropriate going forward.”

Traders in the fed funds futures market expect the central bank to push the rate up to 4.75%-5% by midsummer, then take it down half a percentage point by the end of the year.

However, Fed officials estimated in December that they see the rate passing 5% this year and staying there, with no cuts likely until at least 2024.