Analyst: The market has fully priced in the expectation of three interest rate cuts by the Federal Reserve this year

On March 4th, Analyst Adam Button stated that the present trade environment is difficult and setting interest rate policy is also very challenging. Up to now, there haven't been a great many signs indicating an increase in dovishness from the Federal Reserve. However, yesterday, St. Louis Fed President Bullard emphasized some downside risks facing the economy, which opened the door for the Fed. In addition, each Fed official has made similar "wait-and-see" statements, emphasizing that they are only willing to cut rates after seeing a 2% inflation rate. The market did not wait for a stronger signal. Instead, it increased its expectations for Fed easing from 40 basis points a few weeks ago to 80 basis points this year. The upcoming March meeting still shows a very low possibility of a rate cut, but the probability of a rate cut at the May meeting has now exceeded 50%. At the more distant end of the curve, terminal rates have dropped by approximately 50 basis points. (FXStreet)