Due to the U.S. government's tariff policies raising concerns about a global economic recession, traders have increased their expectations for the Federal Reserve to cut interest rates this year, with some even believing that the Fed will cut rates before the next meeting.

According to the Federal Reserve's official website, the Fed will hold a closed-door meeting of the Board of Governors on April 7 at 11:30 AM local time (11:30 PM Beijing time). The meeting will mainly review and determine the advance and discount rates charged by the Federal Reserve banks.

This meeting comes at a time when Trump's tariff policies have caused turmoil in global markets. The overnight interest rate swap market indicates that the market expects the Fed to cut rates by 125 basis points by the end of this year, equivalent to five cuts of 25 basis points each. Although this expectation has since eased somewhat, the increase is quite significant. Compared to last week, the market has only fully absorbed three rate cut expectations. Swap contracts also show that the possibility of an emergency 25 basis point cut by the Fed next week is about 40%, which is much earlier than the Fed's next scheduled policy meeting on May 7.

It should be noted that Fed Chairman Powell clearly stated last Friday that he would not rush to cut rates even if the market becomes turbulent. In a speech, he emphasized that inflation rates remain high, which means that policymakers need to act cautiously considering the temporary price increases brought about by tariffs.