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Markets shift back towards potential Fed rate cut this year with Iran ceasefire in place

Apr 08, 2026 13:21 UTC

Odds for a reduction jumped Wednesday morning, hitting about 43%, according to the CME Group..

  • Traders are entertaining the possibility of an interest rate cut by the end of the year now that the U
  • S
  • and Iran have agreed to a ceasefire

Traders are entertaining the possibility of an interest rate cut by the end of the year now that the U.S. and Iran have agreed to a ceasefire. Odds for a reduction jumped Wednesday morning, hitting about 43%, according to the CME Group'sFedWatchtool, which uses 30-day fed funds futures contracts to compute market expectations for moves by the Federal Reserve. Market pricing is implying a 3.5% rate in December for the overnight borrowing benchmark, compared with the current effective level of 3.64%. Before the announcement, market-implied odds for a cut were just 14%. Traders had expected the F

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