Federal Reserve May Consider Rate Cuts Amid Economic Concerns

According to Odaily, institutional analysis suggests that the Federal Reserve is unlikely to lower interest rates at its policy meeting next week. However, if concerns about an economic recession triggered by trade wars intensify and materialize, a series of rapid rate cuts may begin in June. Futures markets increasingly bet on the Federal Reserve implementing 25 basis point cuts in June, July, and October. This trend emerged following U.S. President Donald Trump's comments about a 'transition period' after imposing tariffs on multiple countries. His remarks have raised fears of an impending recession, leading to declines in U.S. stocks and bond yields on Monday. SGH Macro Advisors' Chief U.S. Economist Tim Duy noted that while the situation appears calm on the surface, there is growing concern among Federal Reserve policymakers about the risks to their dual mandate and their ability to resist pressure from President Trump to cut rates. Duy warned that a slow response from the Federal Reserve could provoke anger from the Trump administration.