Markets massively increase odds of May Fed rate cut since Trump trade war began

Over 90% forecasting a cut

The US looks destined for an interest rate cut according to the market, with the majority pricing in a 25bps reduction.

According to CME's FedWatch Tool, 91.8% have called that rates will come down to 4.45-4.5% at the upcoming May 6 meeting. Odds of a rate cut have been steadily rising since US President Donald Trump launched a global trade war, massively increasing global inflation and recession expectations. Prior to this event, markets were fairly evenly split between a hold and 25bps cut. US M&A spending jumps 50% in March as deal volume declines Speculation about the Federal Reserve's next move has been amplified by tariffs, as markets questioned how it would balance meeting its inflation ta...