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Data: CME FedWatch Tool; Chart: Naema Ahmed/Axios

Trump's Mexico tariff tweet further accelerated expectations of interest rate cuts from the Fed this year.

What's happening: Early Friday morning, Fed fund futures prices showed the chances of the Fed not cutting U.S. interest rates by its Dec. 11 meeting had fallen below 10%, with the probability of cutting rates at least 2 times rising to 61%, according to CME Group's FedWatch tool.

  • The likelihood of 2 rate cuts or more was just 25% on April 30.
  • Fed Chair Jay Powell and other policymakers have said the central bank does not plan to cut rates even once in 2019.

What they're saying: "The story here is that market participants anticipate the Fed will need to cut rates to maintain the [economic] expansion," University of Oregon economics professor Tim Duy wrote early Friday morning.

  • "The Fed has so far resisted this story, but the odds favor them moving in this direction. The simple fact is that the Fed reacts systematically to a changing forecast. Financial markets are signaling the the growth forecast will worsen enough, or that the risks to the growth forecast will become sufficiently one-sided, that the Fed will have to act."

Flashback: Two rate cuts, or a reduction of the Fed funds rate by 50 basis points, is exactly what Trump's economic adviser Larry Kudlow told me the White House wanted back in March.

Go deeper: Trump's Mexico tariffs mark a declaration of isolationism not seen since the 1940s

Go deeper

Bill Clinton slams McConnell and Trump: "Their first value is power"

Former President Bill Clinton on Sunday called Senate Majority Leader Mitch McConnell's (R-Ky.) vow to fill Ruth Bader Ginsburg's vacant Supreme Court seat before the next presidential inauguration "superficially hypocritical."

The big picture: Clinton, who nominated Ginsburg to the court in 1993, declined to say whether he thinks Democrats should respond by adding more justices if they take back the Senate and the White House in November. Instead, he called on Republicans to "remember the example Abraham Lincoln set" by not confirming a justice in an election year.

Pelosi: Trump wants to "crush" ACA with Ginsburg replacement

House Speaker Nancy Pelosi said on ABC's "This Week" on Sunday that President Trump is rushing to replace the late Supreme Court Justice Ruth Bader Ginsburg because he "wants to crush the Affordable Care Act."

Why it matters: Pelosi wants to steer the conversation around the potential Ginsburg replacement to health care, which polls show is a top issue for voters, especially amid the coronavirus pandemic. The Trump administration has urged the courts to strike down the law, and with it, protections for millions with pre-existing conditions.

Mike Allen, author of AM
Updated 2 hours ago - Politics & Policy

Democrats' Armageddon option

A makeshift memorial outside the Supreme Court yesterday. Photo: Jose Luis Magana/AFP via Getty Images

Furious Democrats are considering total war — profound changes to two branches of government, and even adding stars to the flag — if Republicans jam through a Supreme Court nominee then lose control of the Senate.

On the table: Adding Supreme Court justices ... eliminating the Senate's 60-vote threshold to end filibusters ... and statehood for D.C. and Puerto Rico. "If he holds a vote in 2020, we pack the court in 2021," Rep. Joe Kennedy III (D-Mass.) tweeted.