Fed is in “no hurry” to lower rates. Don’t be surprised by multiple cuts.

Subscribe to enjoy similar stories. President Donald Trump has already succeeded in two of his key economic goals, bringing down long-term interest rates and oil prices. That has been accomplished via a crash in asset values brought about by perhaps the largest tax increase in modern U.S.

history. These moves have made a recession an odds-on probability rather than an outlier before he took office in January. In turn, that has sharply raised the likelihood that the Federal Reserve will be forced to lower its short-term policy interest rate, far more and far sooner than it had anticipated, despite inflation rising, rather than falling toward the central bank’s 2% target.

This follows the administration’s announcement this past week of much larger-than-expected reciprocal tariffs, which sent stock prices plunging in the U.S. and abroad. Economists calculate the tariffs would be equivalent to the biggest U.S.

tax increase in over a half-century; that one led to the 1969-70 recession. Retaliatory tariffs set by other countries, notably China, exacerbated the economic risks and added to the slide in stocks. Treasury yields have plunged as the bond market has begun to price in the likelihood of Fed rate cuts and an economy shifting into reverse.

As the chart here shows, traders in the financial futures market have sharply boosted their expectation for the number of cuts in the federal-funds target rate to more than four from the current range of 4.25% to 4.50%. At the Fed’s most recent policy meeting in March, the median projection called for two cuts by December. Trump posed on Friday on Truth Social, “This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates." Powell, speaking moments later to a group