InflationFears

🚨 TRADERS BETTING ON 4+ FED RATE CUTS IN 2025 TO SAVE THE ECONOMY 🚨

📉 Wall Street is bracing for impact.

With recession fears rising, traders are now betting the Federal Reserve will cut interest rates at least four times in 2025—a dramatic shift in monetary expectations driven by escalating economic pressures.

🔺 WHY THE PANIC?

President Donald Trump’s aggressive new tariff regime has sent shockwaves through global markets.

🛑 Economists warn the U.S. economy is slowing rapidly, and consumer prices are rising—a dangerous mix of stagflation.

📊 ODDS SURGE OVERNIGHT

➡️ The chance of five rate cuts this year jumped to 37.9%, up from just 18.3% the day before.

➡️ There's now a 32% chance of four cuts, bringing the Fed Funds Rate down to 3.25%–3.50%, from its current 4.25%–4.50%.

➡️ Traders are also pricing in a 43.8% chance of a 50-basis-point cut in June, up from 15.9%—a massive swing in sentiment in less than 24 hours.

🧠 WHAT’S DRIVING THIS SHIFT?

Tariffs are expected to fuel inflation—with core CPI forecasts rising as high as 5%.

Simultaneously, economic growth is losing momentum, prompting fears of a recession spiral.

This leaves the Federal Reserve in a bind—stimulate growth by cutting rates, or stay the course to fight inflation?

💬 Roger W. Ferguson, former Fed Vice Chair, warned Friday:

“If inflation stays hot, the Fed may not be able to cut at all—even if growth slows.”

⚠️ Investors, brace for volatility.

The Fed’s next moves could redefine the second half of 2025.

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