I've argued that the May 7th FOMC meeting is the year's most important Fed meeting. Given all the histrionics around tariffs, falling stock prices, the end of American Exceptionalism, and a potential recession, if this is not enough to get the Fed to cut rates on May 7, the cutting cycle ended last December. Things will have to get materially WORSE to revive a Fed cut in the second half of 2025 (which I am not expecting). What is the market pricing? The orange line is the probability of a Fed cut on May 7th. It is now just 16%, or 84%, the Fed does not move at this meeting. The market thinks the Fed is not cutting. June (blue) has a 73% probability of a cut (27% of no move). While the market is still pricing a cut at this meeting, it is still three months away, and the trend is toward another no-move meeting (more than -50%). More and more, it is looking like the Fed is done. I would argue they should be.