Financial markets are in a meltdown, and each lower leg strengthens expectations in the credit market, which Fed will soon offer support.

Bitcoin (BTC), the leading cryptocurrency with market value, traded 8% lower at $ 75,800 and the US shares were on their way to their worst three-day performance, with the S&P 500 futures down approx. 5% on Monday alone and losses approached 15% overall.

Fed has a history of intervening during economic collapse with speed cuts and other stimulus goals. So dealers who are used to liquidity support are betting that Fed will act in a similar way this time.

According to the CME Fedwatch Tool, the Futures Futures Market is now priced in as many as five strolls in 2025. For the next 7 May meeting, there is a 61% probability of a 25 basic point cutting, which would lower the target area to 4.25-4.50%. At the end of the year, the market sees the Bed Foundation’s rate fall as low as 3.00–3.25%.

Risk-off, combined with the growth horror and fed rate cuts, gives the Trump administration what the desirable-shed treasurer yield. The most important 10-year-old dividend-bonchmark for the US economy has dropped to 3.923%.

The popular narrative is that lower yields would make it easier for the Treasury to refinance trillion of dollars in debt in the next 12 months, which is why the Trump administration may be more tolerant of the asset market.

This refinancing of urgent speed stems from a political shift under former Treasury Secretary Janet Yellen, who moved from longer dated coupon issuance to short -term treasury. Since 2023, approximately two-thirds of the deficit was financed through the Law Card-Lated Debt with rates hovering about 5%. Although this may have temporarily supported liquidity, it created a ticking time bomb with expensive short -term debt that must now be rolled over.