Stocks may be retreating and bond yields falling amid increased talk about a recession. But markets are still convinced it’s too early for the Federal Reserve to step in to help.
The odds of a quarter-point interest-rate cut at the Fed’s meeting next week are just 2%, compared with 98% for policy to remain unchanged, according to the CME FedWatch Tool. That’s as near a certainty as traders can give.
The odds are still on the next reduction coming in June, with a probability of a quarter-point move then at 55%. The odds of a May move have picked up–they’re now at 37% compared with 26% a month ago.