Wall Street Journal – Fed made an important pivot, cleared path for a September rate cut

The Wall Street Journal is gated, but here is the link of you can access it:

Fed Clears Path for September Interest Rate Cut

  • Officials held rates steady, but made an important pivot by highlighting a more equal focus on employment and inflation goals

The gist of it is:

  • While Powell and his colleagues didn’t commit to any such move when they held rates steady on Wednesday, he appeared to suggest during a news conference after the meeting that a cut was more likely than not.
  • Powell suggested that at least one official had argued in favor of lowering rates at this week’s two-day meeting. “That was big, because if they were seriously talking about whether or not to go in July, September seems like a done deal unless we get something crazy between now and then,” said Jamie Patton, co-head of global rates at TCW, a Los Angeles-based asset manager.

‘Unless we get something between now and then’ is about rate. The Fed seems on a pre-determined path now. I’d suggest the only thing that could stop a September rate cut is misbehaviour from inflation data. Which can’t be ruled out.

The Federal Open Market Committee (FOMC) meet on September 17 and 18.

This article was written by Eamonn Sheridan at www.forexlive.com. Source