Fed may start a series of rapid rate cuts in June if the economy goes into recession

The Federal Reserve will not cut interest rates at next week's policy meeting, but could begin a series of rapid rate cuts in June if recession fears sparked by the trade war intensify and come true, institutional analysis suggests. At least in the futures market, a growing number of contracts are betting that the Fed will make a 25-basis-point cut in June, July and October, a trend that followed President Donald Trump's comments over the weekend about a ‘transition period’ as he imposed tariffs on several countries. U.S. stocks and U.S. bond yields also fell on Monday amid fears that his comments foreshadowed an impending recession.’ Despite the seeming calm on the surface, if the labour or financial markets start to double dip before the Fed has time to assess the impact of the tariffs, and the entire Trump agenda, on inflation, there is growing concern (among Fed policymakers) about the rising risk of a dual mandate and the ability to fend off pressure from President Trump to cut interest rates,’ SGH Macro Advisors chief U.S. economist Tim Duy wrote in a note that ‘a slow-reacting Fed will incur the wrath of the Trump administration.’