It's becoming a widely held assumption that could push investors into the wrong trades.
BTIG's Julian Emanuel is concerned Wall Street is getting overly confident that the next interest rate cuts will happen by late July.
"The market, in all likelihood, [has] gotten a little bit too optimistic about rate cuts," he told CNBC's "Trading Nation" on Monday. "Rate cuts are coming, but not until September."
BTIG's chief equity and derivatives strategist has two rate cuts in his forecast. He expects the second one in December because the Fed will still be concerned about the lack of inflation. But Emanuel suggests policymakers are in no rush to make a move now.
"The market has gone from being skeptical of rates cuts at all as nearly as three weeks ago to believing that you're going to get a rate cut potentially in June — almost definitely in July, and could get three or four by the end of 2019," said Emanuel.
He's using the latest CME Group data as his gauge of optimism. According to Monday's data, the market is pricing in a 20% chance of a Fed rate cut next week and a more than 80% chance at its late July meeting.
Emanuel cites increasing prospects of cuts, along with the U.S. deal with Mexico to prevent tariffs, as critical drivers in the latest market rally. The Dow just posted its first six-day win streak in more than a year, and the and tech heavy Nasdaq just saw their first five-day win streak since April.
"Anytime you have a straight-line move in either direction, that tends to not carry through," Emanuel said.
Despite his cautiousness, Emanuel is not a bear.
His S&P year-end target of 3,000 is among the highest on the Street and places the index at all-time highs. The rub is much of the upside won't come until later in the year once uncertainty surrounding trade talks between Washington and Beijing likely clears — not now.
"That's a nonstarter for further upside," Emanuel said.