With the latest 50 basis point cut behind them, traders are naturally already trying to divine the Fed’s next move.

As expected, the U.S. Federal Reserve Board cut rates by 50 basis points today to 4%. This is the fifth 50-bps rate cut this year, and it takes U.S. rates to a seven-year low. And although the Fed indicated that it sees risks to its outlook toward slowing, some economists fear that this may be the last of the rate cuts for a while.

“Some disappointment in the markets arose from the Fed’s failure to signal a potential inter-meeting move,” says BMO Nesbitt Burns. “There was no mention of the language used earlier that the Fed would ‘monitor the economy closely in the future.’ This is read to mean that there is less likelihood of another inter-meeting rate cut going forward.”

BMO says the Fed will continue to ease until it sees evidence that the U.S. economy has been revived from its slumber. “Making the Fed’s job more difficult is this year’s rise in bond yields and the dollar. The bond market has deteriorated in recent months, especially in the past week, in fear of a potential rise in inflation on the heels of the surge in energy prices and easing monetary policy. Bonds sold off once again in immediate response to the Fed statement. Nevertheless, expect more from the Fed. The next regularly scheduled FOMC meeting is June 26-27. If the economy continues on the current trajectory, another 50 bps rate cut is likely then as well.”

Merrill Lynch agrees that rates will keep falling, but it sees the Fed moderating the cuts. Merrill notes, “We think another easing is likely at the next FOMC meeting on June 27 however, we think it is also likely the Fed will move to smaller increments, 25 bps, although this depends upon the kind of economic data that is released between now and then.” Merril predicts a federal funds rate of 3.5% by the end of August.

Economists at TD Bank agree with Merrill, saying, “The Fed is likely to ease in 25 basis point increments from here on out, with two such moves likely by September.” TD says the full slate of cuts, “should provide the U.S. economy with the stimulus it needs to avert a full-blown recession. However, U.S. economic activity is likely to remain sluggish through the summer months. There is still no evidence that the shrinking manufacturing sector is poised to turn the corner, and the employment picture has weakened considerably — which could take a toll on consumer spending.”

BMO Nesbitt Burns notes, that the Bank of Canada meets May 29. “We continue to expect the bank to cut rates by 50 basis points — half the cut by the Fed since the bank’s last policy move on April 17.”