As things stand, traders are nearly fully pricing in a rate cut for June at the moment. The odds of that are at ~94% currently. As for the year itself, traders are now pricing in ~84 bps of rate cuts and that's a step up from around ~75 bps yesterday.
It's not a lot but if anything, it suggests that traders are now maybe coming around to the idea that the Fed might need to do more if the US economy crumbles down.
As much as Trump's tariffs are meant to hurt other countries, they are a double-edged sword and the US economy will also be cut in the process. And that is giving rise to recession fears, which will put the Fed in a major dilemma in the big picture.
Sure, recession risks mean that they can pivot back towards a rate cut again. But Trump's tariffs also threaten to stir up inflationary pressures and a stagflation environment is not one the Fed would like to find itself get stuck into at this point.
This article was written by Justin Low at www.forexlive.com.Hence then, the article about traders step up fed rate cut pricing after trump tariffs announcement was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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