【Fed Rate Cut】Trump Posts Again Urging the Federal Reserve to Cut Rates Immediately, but Bond Market Shifts to Betting on Only One Rate Cut for the Full Year

SocialAnxietyStaker · 2026-03-13T08:35:59+00:00

US President Trump, citing rising oil prices due to Middle East conflicts, demanded that Federal Reserve Chair Powell immediately cut rates. However, bond market expectations for rate cuts have cooled, with markets anticipating a reduction of only 24 basis points, and the probability of rate cuts this year has significantly decreased. Inflationary pressures from rising oil prices are affecting economic growth and the employment market, with an uncertain outlook.

SocialAnxietyStaker

2026-03-13 08:35:59

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As the global economy faces the impact of the Iran war, U.S. President Trump has once again pressured the Federal Reserve, demanding that Chair Powell cut interest rates immediately. “The Fed Chair is ‘too late.’ Where is Powell today?” Trump posted on social media Thursday (12th). “He should cut rates right now, not wait until the next meeting!”

Trump’s criticism of Powell comes as he is trying to address the economic effects of the Middle East conflict. The conflict has driven up oil prices and threatened global supply chains. Public dissatisfaction with living costs could hurt the Republican Party’s chances of maintaining control of Congress in the midterm elections in November.

Bond Market Eases Expectations of Rate Cuts

However, as oil prices continue to rise and inflation expectations increase, the bond market has a different view. Bond traders have significantly reduced their expectations for rate cuts by the Fed this year, no longer betting on a 100% chance of a rate cut in 2026.

Interest rate swap contracts tied to Fed policy meeting dates show that traders on Thursday (12th) are betting only a 24 basis point cut this year, down from about 30 basis points late Wednesday. On February 28th, traders had fully priced in at least a 50 basis point cut, expecting the Fed to cut rates twice this year by 25 basis points each.

John Briggs, head of U.S. interest rates at Natixis SA’s investment banking division, said that after Brent crude oil prices returned above $100 per barrel for the first time since 2022, inflation concerns driven by oil prices have clearly intensified. This has led the market to revise down its rate cut expectations from two cuts to just one this year, and in some cases, not even reaching one.

He pointed out that the current environment differs from 2022, with weaker economic growth prospects, a softer labor market, and less fiscal stimulus, but the market’s memory of inflationary pressures from high oil prices remains strong.

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Is gold losing its role as a safe haven? Are war fears driving concerns about rate hikes?

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