The Federal Reserve is expected to keep its benchmark rate unchanged at 4.25%–4.50% despite President Trump’s calls for deep cuts. Q2 growth of 3.0% was largely due to volatile import swings from tariffs, masking a weak 1.2% gain in private domestic demand. Inflation above 2% and low unemployment support the Fed’s cautious stance. Attention is on the policy language for hints of a rate cut in September. The Fed’s credibility and independence are reinforced by not cutting rates, maintaining investor trust in a data-driven approach. Powell is unlikely to signal immediate easing, preserving optionality for September.

Source: David Love, Quiver Editor

Read more at Quiver Quantitative: September Cut Odds Rise on Data-Dependence