More Fed Rate Cuts Could Be Coming. Growth Is a Big Concern.
The Federal Reserve may have to cut interest rates more this year, traders are predicting, as President Donald Trump’s trade policy hits economic growth.
Traders now expect between three and four quarter-point cuts by the end of 2025, according to CME’s FedWatch tool. The market was split between two and three cuts just last week.
“Even if tariffs are ultimately reduced by year-end, the near-term shock and associated uncertainty is likely to drive a near-term slowdown in the U.S. economy and reduce full-year 2025 growth to closer to or below 1%,” UBS chief investment officer Mark Haefele said.