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

SocialAnxietyStaker · 2026-03-13T09:12:21+00:00

Trump is pressuring Federal Reserve Chair Powell to cut interest rates immediately to address economic challenges amid the impact of the Iran war. However, as rising oil prices fuel inflation expectations, the bond market's expectations for rate cuts are cooling, with markets no longer betting on significant cuts from the Federal Reserve, reflecting concerns about slowing economic growth.

SocialAnxietyStaker

2026-03-13 09:12:21

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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 for 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 this year, no longer betting on a 100% chance of the Fed cutting rates once in 2026.

Interest rate swap contracts tied to Federal Reserve policy meeting dates show that traders on Thursday (12th) are betting that this year’s rate cuts will total only 24 basis points, down from about 30 basis points late Wednesday. Back on February 28th, traders had fully priced in at least 50 basis points of cuts, betting that the Fed would cut rates twice this year, each by 25 basis points.

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

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 caused by 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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