Concerns over Trump's tariffs have eased, and expectations for a Federal Reserve interest rate cut have cooled

As Trump's stance on tariffs softens, options and futures traders believe the Federal Reserve does not need to make significant rate cuts to address the economic downturn. Traders' reactions to the new round of tariffs indicate that easing tariffs may alleviate the pressure on the Fed to cut rates. The swap market has reduced rate cut bets, with investors expecting the Fed to take a tougher stance and reduce the number of rate cuts. A JP Morgan survey shows that net long positions in the U.S. Treasury market have fallen to a five-week low