TOKYO, Dec 20 Reuters The U.S. dollar held steady on Wednesday against a basket of peers as traders weighed the chances that the U.S. Federal Reserve would soon begin cutting interest rates.

Fed officials have been pushing back after last week39;s Federal Open Market Committee meeting saw three rate cuts penciled in for 2024, sparking a rally in financial markets.

Market participants are pricing in a 69 chance of the first cut happening at the Fed39;s March meeting, followed by a 63.3 probability of another in May, the CME FedWatch tool shows.

The proverbial genie is out of the bottle now, and the Fed either has to accept that and risk easing policy prematurely or push back very hard and cause a bit of volatility in the markets, said Kyle Rodda, senior financial market analyst at Capital.com.

On Tuesday, Raphael Bostic, president of the Atlanta Federal Reserve, reiterated that he expected two rate cuts in the second half of the year, but added there was no urgency now.

The same day, Richmond Fed President Thomas Barkin said whether the central bank can deliver on forecasts of rate cuts depends on how the economy performs.

The dollar index inched up 0.13 to 102.25 , after sliding more than 0.3 the previous day and touching a fourmonth low of 101.76 last week.

The greenback39;s movement will depend on economic data supporting the rate cuts that have been priced in, said Rodda.

The U.S. dollar is the inverse of the socalled 39;everything rally,39; which will beat…