DBS said the market was expecting a series of rate cuts from the Federal Reserve, but aggressive market pricing could be disappointed and ultimately cause panic. "Inflation below 3 per cent and policy rates above 5 per cent tend to be difficult to co-exist, so some monetary easing is warranted," economist Taimur Baig wrote in a note. "But the rate cuts reflected in the market appear to be too large. For the yield curve to reflect more than 200 basis points of rate cuts over the next 16 months, the US economy would have to weaken significantly and inflation would have to fall below 2 per cent, which is unlikely to happen." DBS's basic view is that the Fed will cut rates by 150 basis points by the end of 2025 and by 25 basis points this week.