The rapid repricing reflects the fear sweeping global markets, with US President Donald Trump showing little appetite to back down on aggressive trade tariffs announced last week. He told reporters on Sunday evening to “forget markets for a second”.
Traders expect the US Federal Reserve to slash interest rates another five times this year as the US administration’s trade tariffs ignite fears of a global recession.
Markets are pricing 125 basis points of easing by year end, equivalent to five quarter-point moves, according to overnight interest rate swaps. As recently as last week, just three reductions were fully priced.
