According to CME's "FedWatch" data, the probability of a rate cut of 25 basis points in May is only 33.3%, while the likelihood of maintaining interest rates is as high as 66.7%.
What does this mean? Simply put, the market's fantasy of a rate cut in May is quickly cooling.
Of course, the market trades on expectations, and when expectations cool, it inherently affects sentiment. The next few weeks are a key phase for repricing interest rate expectations, which could very well be the ignition point or turning point for the next round of market movements.
