According to BlockBeats, on March 4, analyst Adam Button highlighted the current challenging trade environment and the complexities in formulating interest rate policies. So far, there have been few signs of a more dovish stance from the Federal Reserve. However, St. Louis Fed President Mussa Alem yesterday underscored some economic downside risks, potentially opening the door for the Fed.
Additionally, every Fed official has issued similar 'wait-and-see' statements, emphasizing the desire to see a 2% inflation rate before considering rate cuts. The market has not waited for stronger signals, as it has increased the expected Fed easing this year from 40 basis points a few weeks ago to 80 basis points.
The upcoming March meeting still shows a very low likelihood of a rate cut, but the probability of a cut at the May meeting has now exceeded 50%. Further along the curve, the terminal rate has decreased by about 50 basis points.
