The market has eliminated 60 foundation factors of Fed easing within the 12 months forward

Fed pricing has substantially shifted since the peak of angst about growth, tariffs and inflation two weeks ago. At the time, the market was pricing in 131 bps in easing through the April 29, 2026 scheduled FOMC meeting.

Today, that has dropped to 71 bps as the market cheers the sharp drop in US-China tariffs.

Even in the past day, the move has continued as a Sept cut has gone from fully priced in (and a tad more) to now at 91%.

I think for risk assets this is ultimately a good thing as provides for a large Fed put on top of what’s a seeming re-emergence of the Trump put. For the US dollar it’s more complicated as any weakness in the US economy now leaves it vulnerable to a rapid repricing lower in rates.