Analysts do not expect Fed to cut rates soon — Yahoo Finance

The US-China tariff pause made analysts doubt that the Federal Reserve (Fed) will cut rates soon amid easing concerns of the US economy sliding into a recession. Before the deal, the central bank was expected to ease monetary policy in summer, Yahoo Finance says. 

Markets see at least one reduction in borrowing costs by year-end. At the same time, the CME Group's FedWatch tool shows only a 7% probability of the Fed holding rates steady through December. 

Barclays analysts believe the US economy sidestepping a recession and the projected unemployment rate flat at 4.3% will allow the Fed to stimulate GDP growth at the end of the year. 

Meanwhile, Lazard strategists think that, despite inflation declining in April, tariffs will prompt its rate to rise in the following months. Hence, the experts do not expect monetary easing from the Fed this year. 

However, according to ING economists, de-escalation of trade tensions will help mitigate concerns about rising prices. The Fed may also be forced to cut rates soon after its summer meetings as the US GDP growth slows.