If the economy enters a recession, the Federal Reserve may begin a series of rapid interest rate cuts in June

ChainCatcher news, institutional analysis indicates that the Federal Reserve will not lower interest rates at next week's policy meeting, but if concerns about an economic recession triggered by the trade war worsen and materialize, a series of rapid rate cuts may begin in June. At least in the futures market, an increasing number of contracts are betting that the Federal Reserve will cut rates by 25 basis points in June, July, and October. This trend emerged after U.S. President Trump’s comments about a "transition period" over the weekend, as he expressed concerns about tariffs imposed by multiple countries. Due to fears that his remarks signal an impending economic recession, U.S. stocks and Treasury yields also fell on Monday.

"Although it appears calm on the surface, if the labor or financial markets begin to slide before the Federal Reserve has a chance to assess the tariffs and the overall impact of Trump's agenda on inflation, (Federal Reserve policymakers) are increasingly concerned about the rising risks of a dual mandate and their ability to withstand pressure from President Trump to cut rates," wrote Tim Duy, Chief U.S. Economist at SGH Macro Advisors, in a note. "A slow-reacting Federal Reserve will incur the wrath of the Trump administration."