From CNBC: 2024-07-30 15:39:39

Federal Reserve Chair Jerome Powell testifies before the Senate on monetary policy, hinting at future interest rate cuts. Market indicators suggest that a rate cut in September is almost certain. Policymakers may keep rates unchanged for now but signal potential cuts in upcoming meetings.

Goldman Sachs economists predict subtle but critical changes in the Fed’s statement to pave the way for future rate cuts. Powell may offer guidance during the press conference. The favorable inflation outlook may push the committee closer to an initial interest rate cut, according to economist David Mericle.

Inflation rates have improved but still exceed the Fed’s target. Despite economic growth and a strong labor market, the Fed is cautious about future policy moves. Expectations for a gradual easing starting in September are high, but the Fed aims to strike a balance between policy adjustments and market certainty.

Fed officials remain uncertain about inflation trends but hint at potential September moves. With GDP growth exceeding expectations and ongoing economic strength, policymakers brace for possible easing. The Fed will not provide quarterly projections at the upcoming meeting, maintaining a cautious approach to policy communication.

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