Traders are quickly losing faith in the ability of the Federal Reserve and European Central Bank to lower interest rates as policymakers on both sides of the Atlantic signal caution.

Money markets are betting on the Fed delivering a single quarter-point rate cut by year-end and the ECB remaining on hold. That compares with pricing for two such reductions in the US and one in Europe earlier this month. It also reflects a more careful tone from Jerome Powell and Christine Lagarde.

The Fed chair maintained that the central bank needed to stay on guard against inflation risks after keeping key rates on hold Wednesday. Lagarde, the ECB president, indicated officials have scope to pause their cutting cycle after policymakers voted unanimously last week to hold the benchmark steady.

The latest move in bets came after measures of inflation in France and some German states edged higher on Thursday and following the Fed signalled patience on Wednesday.

“The ECB has certainly raised the bar for further rate cuts,” said Pooja Kumra, senior UK and European rates strategist at Toronto Dominion Bank. “Any further rate cuts are more likely to be driven by downside risks to growth rather than temporary deviations in inflation.”

The euro-area economy unexpectedly eked out growth in the second quarter but the underlying figures showed contraction in Germany and Italy, the region’s biggest and third-largest members.

Still, some expect the ECB to deliver as many as two more rate cuts this year. Economists at Morgan Stanley are sticking to their forecast for quarter-point reductions in September and December.

Meanwhile, wagers placed through options on derivatives tied to the Euribor funding rate are targeting more than €10mn ($11.4mn) of profit from a half-point of cuts by year-end.