Recently, there have been positive signals in Sino-US relations, with both countries issuing a joint statement indicating a easing of trade tensions. This significant development has attracted close attention from the financial markets, particularly regarding the expectations for the direction of the Federal Reserve's monetary policy.

Several major financial institutions on Wall Street and interest rate market traders have quickly adjusted their predictions regarding the timing of the Federal Reserve's interest rate cuts. The overall trend shows that the market generally believes the Federal Reserve will delay its rate cut actions.

Goldman Sachs and Barclays made the most significant adjustments, pushing back the expected timing of the first interest rate cut of the year from July to December. Citibank also adopted a similar conservative stance, delaying the rate cut expectation from June to July. JPMorgan has postponed its originally expected September rate cut to the end of December.

At the same time, Deutsche Bank maintained a relatively stable position. They upheld their original assessment, expecting the Federal Reserve to implement its first rate cut in December and to make two additional cuts in the first quarter of 2026, each by 25 basis points.

These anticipated changes reflect a reassessment of the economic outlook and inflation pressures by the financial markets. The improvement in Sino-U.S. trade relations may have a positive impact on the economy, thereby reducing the necessity for the Federal Reserve to rapidly cut interest rates.

However, despite most institutions delaying their interest rate cut expectations, they still believe that the Federal Reserve will begin a rate cut cycle within the next year. This indicates that the market still expects the U.S. economy may face some downward pressure, necessitating support from monetary policy.

As economic data continues to be updated and geopolitical situations change, market expectations regarding Federal Reserve policies may be further adjusted. Investors and policymakers will closely monitor economic indicators in the coming months to better predict the Federal Reserve's next steps.