On April 10, the financial markets were swept by a storm of interest rate cut expectations. The latest data shows that traders' bets on the Federal Reserve implementing a 100 basis point rate cut before the end of 2025 have significantly expanded, reflecting a reassessment of the U.S. economic outlook by the market. Although the current federal funds rate remains in the 5%-5.25% range, recent signals such as slowing inflation data and a cooling job market are prompting investors to position themselves for a shift in monetary policy.
It is worth noting that the bets on interest rate cuts have shown a 'leap' growth characteristic. Compared to March, the probability of a 25 basis point rate cut at the December meeting has surged from 42% to 81%, and the aggressive expectation of a 100 basis point cut for the entire year has more than doubled since the beginning of the month. Analysts warn that this expectation gap may exacerbate market volatility, and it is necessary to closely monitor subsequent economic data and changes in statements from Federal Reserve officials.
