Fed Cut Odds Slip
- Markets currently price about a 45–50% chance of a Fed rate cut by year-end, according to FXStreet. - Treasury Secretary Scott Bessent said the Fed can wait on cuts, even while favoring them. - Coverage ties geopolitical oil risks and mixed Fed messaging to pushed-back cut timing ( ).
Traders have pushed back their bets on Federal Reserve rate cuts, with markets now pricing only about even odds of a cut by the end of 2026. (cmegroup.com, fxstreet.com) Rate markets tracked by CME FedWatch showed little expectation of a move at the Federal Open Market Committee’s April 29, 2026 meeting, and private rate trackers showed only partial odds of a cut by the December 9, 2026 meeting. FXStreet on April 21 put the year-end cut chance around 45% to 50%. (cmegroup.com, rateprobability.com, fxstreet.com) Treasury Secretary Scott Bessent said last week that the Fed could wait before lowering rates, even though he has argued for cuts in earlier comments. CNBC reported on April 14 that Bessent said higher oil prices and the Iran war had added enough uncertainty for the central bank to stay on hold for now. (cnbc.com, thestreet.com) The Fed sets a short-term benchmark rate that feeds through to borrowing costs across the economy, from business loans to mortgages. When traders think inflation risks are rising, they tend to push expected cuts further out. (cmegroup.com, cbsnews.com) That is what happened this month as oil risk and war-related supply fears complicated the inflation outlook. A Reuters poll published April 22 found economists now expect the Fed to wait at least six months before cutting, with the first move pushed to late 2026. (usnews.com) The political backdrop has added another layer. At his Senate confirmation hearing on April 21, Fed chair nominee Kevin Warsh said he made no promises to President Donald Trump on interest rates and said he would act independently. (detroitnews.com, politico.com) Trump has repeatedly called for lower rates, while Bessent has shifted from urging faster cuts to saying the Fed can stand pat. That mix of White House pressure, nominee testimony and sticky inflation signals has left investors focused less on whether cuts are wanted and more on whether prices will let the Fed deliver them. (apnews.com, cnbc.com, thestreet.com) For now, the market message is narrower than the political one: no imminent cut, and no clear consensus that one arrives before year-end. The next test comes with the Fed’s April 29 decision and whatever officials say about inflation, oil and the path from here. (cmegroup.com, usnews.com)
