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The market has fully priced in the expectation that the Federal Reserve will cut interest rates three times this year

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2025-03-04 15:29:34
Analyst Adam Button said the current trade environment is difficult, and setting interest rate policy is equally difficult. So far, there are few signs of the Federal Reserve becoming more dovish, but St Louis Fed President Mousalem yesterday highlighted some downside risks to the economy, opening the door for the Fed. In addition, every Fed official issued a similar "wait and see" statement, and emphasized the hope of seeing 2% inflation before cutting interest rates. Markets are not waiting for stronger signals, as they have increased the Fed's easing this year from 40 basis points a few weeks ago to 80 basis points. The upcoming March meeting still shows a very small chance of a rate cut, but the probability of a rate cut at the May meeting is now over 50%. Further down the curve, the end point rate fell by about 50 basis points.
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