concerns that the us might be approaching a recession have traders expecting interest rate cuts from the federal reserve this year despite policy makers projections from march that signal otherwisewhile the median estimate from fed policy makers points to the likelihood that rates will need to end the year slightly above where they are now traders see about 1 chance of that happening as of friday morning instead theyre pricing in an almost 99 likelihood that the fedfunds rate target will be at or below its current range of 475 and 5 by decemberthe divergence reflects a difference in baseline scenarios fhn financial macro strategist will compernolle said via phone on thursday for the fed the banking sector is fine and inflation is too high for markets the baseline scenario is that a recession is going to happen at some point one of those baseline scenarios has to win out the fed and the market have been at odds repeatedly over the course of the ratehike cycle that began in march of last year traders now mostly expect the fedfunds rate to end the year below the feds median forecast of 51 with the greatest likelihood centered around threequarters of a percentage point lower than what policy makers think is appropriate roughly that rate outlook has shifted a bit since thursday and wednesday when traders were factoring in a full percentage point lower fridays data showed that the us added a robust 236000 new jobs in march defying the federal reserves hopes for a big slowdown in hiring as central bank struggles to tame high inflation economists polled by the wall street journal had expected 238000 new jobsafter the report traders priced in a 68 chance of a quarterpoint hike by the fed in may followed by either a pause or rate cut in june readwhy good friday complicates how stockmarket traders will digest march jobs reporttreasury yields jumped after the march jobs report with the policysensitive 2year rate rising 16 basis points to 3966 in morning trading us stock exchanges are closed for the good friday holiday while the us bond market is open for a half day this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal