Odaily News Futures markets are betting the Federal Reserve will not cut interest rates at next week’s policy meeting, but the central bank could launch a rapid series of rate cuts in June if growing concerns about a trade war-induced recession come true.
After U.S. President Trump's speech on the economic "transition period" last weekend, traders bet that the Federal Reserve will quickly cut interest rates in the economic downturn, and the futures market increasingly expects consecutive rate cuts in June, July and October. Fed officials face the dilemma of rising inflation and a weak economy. U.S. stocks and U.S. Treasury yields also fell sharply on Monday due to concerns that Trump's remarks indicated an impending recession.
Fed Chairman Jerome Powell said on Friday that the Fed is in no rush to cut interest rates because the labor market remains strong, inflation is bumpy on the road to its 2% target, and there is great uncertainty about the impact of Trump's trade, fiscal, immigration and regulatory policies. Economists say these policies could push up prices and slow economic development at least in the short term. Goldman Sachs economists lowered their forecast for U.S. economic growth to 1.7% on Monday and raised their inflation forecast. (Jinshi)