Traders are now pricing more than 50% chance of a fifth cut by year-end

April 4, 2025
-FXnews

Following China’s retailiation news, traders increased the rate cuts expectations to 116 bps by year end. That’s more than 50% chance of a fifth cut.

This is the market screaming for an end to the trade war or support from the Fed as things are expected to get worse without central bank easing.

The longer the Fed remains on the sidelines, the more aggressive the rate cuts expectations will be because the market will price in bigger cuts to combat a potential hard landing