Traders bet that summer will clear the fog for the Federal Reserve (FED)

Jin10 data, May 24 - For months, the policymakers at The Federal Reserve (FED) have made it clear that they want to see clearer responses from fiscal and trade policies as well as the economy before taking further action on interest rates. Over the past month, this cautious stance has led traders to withdraw their bets on a rate cut at the June meeting, and the market now expects the policy pause to extend until the July meeting. However, futures market positions indicate that the probability of a rate cut before the end of September remains slightly above 50%. This essentially bets on a clearer situation in the next four months: either inflation slows down to pave the way for policy easing, or economic deterioration forces the FED to ramp up stimulus.