Expectations of "emergency rate cut" rise

Expectations of an emergency rate cut by the Federal Reserve are rising as there is no sign that Trump will back down on tariffs. Swap transactions show a roughly 40% chance of the Fed cutting rates by 25 basis points next week, well ahead of the Fed's rate decision scheduled for May 7. Meanwhile, investors have sold risks and snapped up bonds, sending yields plummeting. On Monday, the yield on US two-year Treasury bonds, which are the most sensitive to monetary policy, fell 22 basis points to 3.43%, bringing the total decline in US two-year Treasury yields since Trump announced the tax to about 50 basis points.