When rate-cut odds fall to 7%, this isn’t just another number.
It’s a clear message from the market:
No rate cut anytime soon.
Why did pricing shift so quickly?
Markets had been expecting an early start to a monetary easing cycle. But recent economic data whether inflation readings or labor market strength has significantly changed the outlook.
Inflation remains above target, and the economy has not shown the kind of sharp slowdown that would force the central bank to act immediately.
In simple terms:
There isn’t enough pressure to cut rates right now.
What does this mean in practice?
The dollar remains relatively supported, because “higher for longer” rates imply better yields on dollar-denominated assets.
Equities may face volatility, since part of the previous rally was built on expectations of rapid rate cuts.
Gold could enter a temporary balancing phase, as the metal reacts strongly to shifts in monetary policy expectations.
More importantly:
The shift from expecting early cuts to a “higher for longer” scenario forces a repricing of risk across all markets.
Markets don’t move based solely on actual decisions.
They move on expectations.
And when expectations change suddenly, capital moves quickly.
The real question now is not:
Will rates be cut in March?
But rather:
When will the first actual cut begin?
And how many cuts will occur throughout the year?
Because the next monetary policy cycle will determine liquidity direction, financing costs, and global risk appetite.
In markets, 7% means one thing:
March is no longer on the table.
But the cycle isn’t over…
It’s simply delayed.
