Rate cut expectations will fade as coronavirus fear eases


Markets expecting an interest rate cut are reacting to the coronavirus scare and likely will reverse once the fear starts to fade, St. Louis Fed President James Bullard said Friday.

Central bank officials have indicated that they are content to keep policy on hold as they watch economic developments play out.

However, traders in the fed funds futures market are indicating about a 54% chance of a rate cut by June and a 58% probability of a second move lower by the end of the year, according to the CME’s FedWatch tracking tool.

In an interview on CNBC’s “Squawk Box,” Bullard pushed back on the likelihood of a cut, saying current policy seems right considering the pace of the record-breaking…


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