market now pricing in fewer rate cuts

the market is pricing in low odds that the fed will continue its interest rate cuts beyond the 4/30 fomc meeting. the premise behind this is the relative stability in the major segments of the credit markets, and in other asset classes such as corporate equities. fed chairman bernanke also affected rate expectations by focusing mostly on the fed's liquidity provisions and saying relatively little on the us economy and noting that the impact of rate cuts was "in train."

for the 4/30 fomc meeting, the market is priced for 100% odds of a 25-basis-point cut and 32% odds of a 50-basis-point cut, down from 36% on friday. for the 6/25 fomc meeting, the market is priced for 100% odds of a cumulative 25 basis points in cuts and for 62% odds of a cumulative 50 basis points in cuts, down from 72% odds on friday. as for the 8/5 fomc meeting, the market is priced for 100% odds of a cumulative 25 basis points in cuts and 64% odds of 50 basis points in cuts.