Fed poised to cut rates, but Powell expected to stay cautious
The Federal Reserve is widely expected to deliver a quarter-point rate cut this week, while Chair Jerome Powell is likely to offer little in the way of new policy guidance amid growing divisions on the committee.
Powell has recently underscored rising risks to the labour market, signalling that the balance of risks has shifted from inflation toward employment. A softer-than-expected inflation print last week has also reduced pressure from hawkish members pushing for patience on cuts.
Analysts say the Fed can afford to focus more on supporting job growth so long as inflation expectations stay contained, with Powell aiming to guide policy gradually back toward a neutral stance.
The policy decision is due Wednesday at 2 p.m. in Washington, followed by Powell’s press conference 30 minutes later. The meeting will not include updated forecasts or rate projections.
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Markets have priced in a full 25 bps rate cut, with Powell’s tone to set the short-term direction for yields and the dollar.
This article was written by Eamonn Sheridan at investinglive.com.
