Traders boost bets on June start to Fed rate cuts as Trump puts on new tariffs

ReutersApr 2, 2025 8:46 PM

April 2 (Reuters) - Traders boosted bets the Federal Reserve will start cutting interest rates in June and deliver a total of three quarter-point reductions to the policy rate by October, as U.S. President Donald Trump announced new tariffs on imports, which economists say could boost inflation but could also slow the economy.

Short-term interest-rate futures now reflect about a 70% chance of a Fed rate cut when the U.S central bank meets in June, up from about 60% before the tariffs were announced.

Before the announcement the contracts showed traders felt the Fed would deliver a total of three rate cuts by December.

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