Wall Street brokerages have pared expectations for the Federal Reserve's interest rate cuts this year after the United States and China agreed to a temporary trade truce, with Goldman Sachs forecasting only one U.S. rate cut this year. Washington and Beijing announced on Monday they would slash tariffs on each other for 90 days. The U.S. will cut tariffs imposed on Chinese imports to 30% from 145%, while China will cut duties on U.S. imports to 10% from 125%.
Traders, on average, now expect two U.S. rate cuts totaling 54 basis points by the end of 2025, compared with as many as four rate cuts expected last month, according to data compiled by LSEG. Separately, consumer prices in the U.S. rebounded moderately in April, per data published on Tuesday, with headline inflation increasing 0.2% last month after dipping 0.1% in March. Economists polled by Reuters had forecast that the CPI would rise 0.3%.
