Investors Bet Fed Will Stand Pat After U.S.-China Tariff Deal

Monday's trade agreement between the U.S. and China may have also made it easier for the Federal Reserve to hold interest rates steady without worrying about the economy.

Investors now think there's a 92% chance that the central bank keeps borrowing costs at their current level at its next meeting in June, according to the CME FedWatch tool. A week ago, the gauge had the odds of that happening at 69%.

"The Fed will find it hard to ease in the near term and the first cut penciled in for December remains the base case," Deutsche Bank analyst Jim Reid said in a research note Tuesday.