Traders tend to assume that the Fed will cut interest rates only twice this year, the first before the end of September

Traders' confidence that the Federal Reserve will cut interest rates by 25 basis points three times this year is rapidly eroding, and the market is now pricing in only two rate cuts. Interest rate swaps show monetary easing in the U.S. of around 60 basis points this year, according to agency pricing, which means that two rate cuts are most likely, with the first expected before the end of September. On Friday, the probability of three rate cuts by the Fed remained above 50%. U.S. economic data remains resilient, and Fed officials don't see the need for a rate cut right now. Rainer Guntermann, a strategist at Commerzbank, said that the U.S. inflation data to be released on Wednesday will be crucial, following Friday's unexpectedly strong jobs data report and the Fed's hawkish comments over the weekend.