Trade Tensions May Prompt Early Fed Rate Cuts, TD Securities Reports

According to BlockBeats, TD Securities has indicated that escalating trade tensions could lead the Federal Reserve to cut interest rates earlier than anticipated, with the yield on 10-year U.S. Treasury bonds potentially dropping to 3% by the end of the year. Strategists, including Oscar Munoz, have revised their forecast for the Federal Open Market Committee's (FOMC) first rate cut from July to June, now expecting rate cuts at each meeting until May 2026. Analysts also estimate a 50% chance of a recession in the U.S. economy. As U.S. President Donald Trump's tariff measures impact global markets, TD Securities has joined institutions like Goldman Sachs and UBS Global Wealth Management in advancing their expectations for U.S. policy easing. Swap traders are now pricing in more than four rate cuts by the Fed before the end of the year, compared to around three expected on April 1, the day before Trump announced unexpectedly reciprocal tariffs.