A rate cut is nearly certainty in September

 

Jerome Powell’s Press Conference

Given that the Fed appears to be preparing markets for a rate cut in September, it’s worth sharing a few quotes from Jerome Powell’s FOMC press conference and some commentary.

• “Data suggest that the labor market has returned to where it was on the eve of the pandemic.”
• “If the labor market were to weaken unexpectedly, we are prepared to respond.”
• The Fed remains data-dependent.
• Powell thinks a rate could occur in September if inflation continues moving down with expectations and the labor market remains firm.
• The Fed is “well-positioned to respond to labor market weakness.” A poor employment number from the BLS all but assures a rate cut in September.
• They didn’t cut at the meeting because they didn’t want to undermine progress on inflation.
• He won’t give specific forward guidance on the pace or timing of future rate cuts.
• “This is a broader disinflation.” This is in reference to the recent decline in inflation compared to last year. Powell is optimistic the recent decline in inflation is sustainable.
• “There was a real discussion about the case for reducing rates at this meeting, but the strong majority supported not moving rates at this meeting.”
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• L. Roberts
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