According to CME Fedwatch the odds of a rate cut in March jumped to 96.3% today from 8.9% a week ago.
Looking ahead to December, it's highly likely at least two additional cuts are on the way.
December Rate Cut Probabilities
December Implied Rate Cuts Probabilities vs Current FF Rate
- At Least 2 Cuts: 96%
- At Least 3 Cuts: 77%
- At Least 4 Cuts: 40.6%
- Feb 19: Fed Minutes Highlight Coronavirus Concerns and Uncertainty 8 Times
- Feb 24: Bond Yields Crash and Gold Soars on Pandemic Threat
- Feb 25: CDC Admits Spread of Coronavirus in the US Appears Inevitable
- Feb 25: Lie of the Day: This is Not a Pandemic
- Feb 25: Nearly 50% Odds of "At Least" 3 Rate Cuts by December
- Feb 26: Trump says We are "Very, Very Ready for the Coronavirus, for Anything"
- Feb 27: Useless Act: California Monitors 8,400 People for Coronavirus; 33 Test Positive
- Feb 27: Containment Fails: Coronavirus Tweets of the Day
Rate cuts odds started rising before coronavirus threat materialized on news Largest Global Shipping Decline Since 2009.
Mike "Mish" Shedlock