Federal Reserve Chairman Jerome Powell holds a press conference following a two day Federal Open Market Committee policy meeting in Washington, January 30, 2019. Leah Millis | Reuters

With pretty much everyone convinced that the Fed is going to be cutting interest rates at some point this year, the central bank faces one rather pressing question: Why wait? After all, the market already is pricing in at least reductions this year and probably three. Though the Federal Open Market Committee meets next week, there is little expectation of a move then. Not moving next week essentially comes down to three factors, according to Fed watchers: The looming G-20 summit at which the U.S. and China, at least theoretically, could reach a trade agreement; a desire not to be seen as overly influenced by the financial markets and President Donald Trump's hectoring; and the desire to avoid making December's rate hike look like a policy mistake.

"They don't want to be seen as cowing to any sort of pressure, be it political from the White House or from the market," said Lindsey Piegza, chief economist at Stifel. "The Fed is going to look at the data, they're going to look at what their models say. To them, it doesn't matter what the markets say."

'No cuts this year is hard to believe'

Wall Street, though, is clamoring for a cut. Futures pricing Friday afternoon in the fed funds market showed a 21% chance of a move at the June 18-19 meeting, down from 30% earlier in the day on some stronger-than-expected economic data. The chance of a July cut remained at 85%, while the market was figuring a 61% probability for three moves in total by the end of the year. As things stand currently among Chairman Jerome Powell and his fellow Fed officials, no moves are indicated. That is likely to change when FOMC members submit their economic projections at the June 18-19 meeting, which include the "dot plot" of individual members' expectations of where rates are headed over the next few years. "I can't imagine what they are going to do with the dots," Jeffrey Gundlach, founder of DoubleLine Capital, said in a webcast Thursday. He noted the "big divergence" between the market and Fed projections and said, "No cuts this year is hard to believe." In May, Gundlach recommended a straddle options trade that benefited from wide fluctuations in interest rates. The trade recently had netted a 22% gain. Fed officials have been under intense pressure from more than the markets. Trump has been a continuous nemesis to the central bank, most recently repeating his demand for lower rates and saying he's "not happy with what [Powell has] done" as Fed chair. Along the same lines, the Fed has its credibility to worry about. Trump and a growing number of market participants view the December rate hike — the fourth of the year — as a policy mistake that came amid several pivots and missteps that caused Powell and other officials to change their public statements to assuage investors' nerves.

'A verbal intervention'