Trump Delays Tariffs for 90 Days, Market Rate Cut Expectations Plummet

According to CME FedWatch data, the probability of the Federal Reserve cutting rates in May has dropped sharply from 57% to just 17.3%. This is mainly due to President Trump's announcement to delay tariffs for 90 days and the latest release of the March Federal Open Market Committee (FOMC) meeting minutes.

Currently, Trump has decided to suspend new tariffs for most countries for 90 days while raising tariffs on China to 125%, which alleviates concerns about a full-blown trade war. However, China's retaliatory actions and rising inflation expectations have reinforced the Fed's hawkish stance. Therefore, policymakers have indicated that they are not in a hurry to cut rates.

Currently, the market has rebounded after Trump announced the 90-day tariff delay. However, the message from the Fed is clear: hopes for a rate cut in the short term are slim.