🔥 Fed Shockwave: Markets Now Price a 90% Chance of Rate Cuts — Wall Street Scrambles Overnight
The Federal Reserve dropped a late-night bombshell: policymakers are ready to keep lowering interest rates. Markets instantly exploded with optimism, and major banks rushed to rewrite their forecasts — rate cuts this week are now seen as almost guaranteed.
Kevin Hassett, a top contender for the next Fed Chair, publicly backed continued cuts, hinting that “major good news” from Trump is coming soon. He also said the 10-year Treasury yield has “plenty of room to fall,” adding fuel to the market’s bullish pivot.
📊 Market Expectations: Rate-Cut Probability Nears 90%
Fresh CME data shows a dramatic shift:
• 89.6% chance of a 25 bps cut this week
• 10.4% chance rates stay unchanged
• 92.2% chance of at least one cut before January
🏦 Wall Street U-Turn: Analysts Are Tearing Up Their Reports
In a rare moment, major banks changed stance together:
• JPMorgan & Morgan Stanley: Now expect a cut this week.
• Nomura: Revised twice — calling for a cut now, and more in June & September 2026.
• Standard Chartered: Moved from “hold” to “cut.”
The November jobs data forced this pivot — private sector jobs posted the biggest drop since March, far weaker than forecasts. A weakening labor market leaves the Fed little room to wait.
🔍 What Matters Most Now
Rate cuts may be locked in. The real battle is inside the Fed:
• 4 hawks are expected to oppose cuts
• Governor Milan may push for a bold 50 bps cut
Goldman Sachs projects cuts resuming in March and June next year, pulling the benchmark rate toward 3.00%–3.25%.
