If you enjoy our content and would like to support our work, we offer a premium, high-frequency macro research service, Macro Suite. If you’re interested in gaining access, please feel free to reach out to us here for more information. What...
If there’s one takeaway from this meeting, it’s that the Committee wants to position themselves much more cautiously on the inflation outlook, but the Fed is just a couple of bad labor market prints from having to put more cuts back on the table.
Now that rate normalization is about to move into the next, slower phase, it is important that they do not predetermine the scale of normalization.
We will be hoping for two things at the September meeting this week: a 50 bps cut and minimal upwards revisions to the unemployment rate projections in the Summary of Economic Projections (SEP).
By delaying rate cuts in search of certainty, the Fed risks being behind the ball. The FOMC should actively keep the option of a 50 basis point cut on the table between now and the September meeting.
