Lurking beyond traders’ apparently unwavering confidence that the Federal Reserve will cut interest rates this month is a more nebulous outlook about what the central bank will do after that.
Traders are still pricing a full quarter-point reduction in July, yet they have slowly scaled back views on how much easing will take place for all of 2019 -- lowering expectations to 64 basis points from around 80 basis points two weeks ago. At the same time, options traders are still adding to bets the Fed will embark on a series of cuts, rather than a one-and-done approach.
