Still waiting…Fed wants more data before cutting policy rates

While acknowledging further progress on economic data, the July Federal Open Market Committee (FOMC) statement gave little indication on the timing of the first rate cut. During his post-meeting press conference, Fed Chair Jerome Powell provided some fodder for the doves hoping for explicit guidance that cuts (consistent with current market pricing) would commence in September, noting that conditions could be in place to warrant a cut “as soon as the next meeting.” Though the Fed maintains an easing bias, the Committee appears content to wait for more inflation and labor data to boost its confidence in its benign outlook before cutting policy rates.