September Rate Cut Still Uncertain

Later this week, central bank officials will gather in Jackson Hole, Wyoming, for their annual conference. All eyes are on Friday, when the Federal Reserve Chair is expected to share insights that could shape upcoming policy decisions ahead of September's meeting.

The Federal Reserve finds itself in a tricky spot. On one hand, slower job growth points to a possible need for lower interest rates, but stubbornly high inflation complicates the picture. Just a few weeks ago, investors were nearly certain a rate cut would come in September. Revisions to job growth data and a weaker July employment report pushed expectations for a quarter-point cut above 90 percent earlier in the month.

That optimism has faded somewhat. A recent spike in wholesale inflation has cast doubt on the likelihood of a rate cut, pulling the odds back down into the low 80-percent range. Policymakers are now faced with a tough choice: keep rates steady and risk further slowing in the job market, or cut rates and risk sparking more inflation. Meanwhile, pressure from the White House for rate reductions adds another layer of complexity to the decision ahead.

Disclosure

This communication contains forward-looking statements regarding potential monetary policy actions by the Federal Reserve, including the possibility of an interest rate adjustment at its upcoming September meeting. These statements are based on current market expectations, economic data, and public commentary by policymakers.

Forward-looking statements involve risks and uncertainties that may cause actual outcomes to differ materially from those expressed herein. Such risks include, but are not limited to, changes in inflation trends, labor market conditions, political pressures, global economic developments, and unexpected policy decisions by the Federal Reserve or other government entities.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect conditions as of the date of this communication. We undertake no obligation to update or revise these statements publicly to reflect future events or circumstances except as required by law.

Source:

https://www.statista.com/chart/35001/rate-cut-probability/?lid=6ismkafafr2f&utm_source=braze&utm_medium=email&utm_id=463b3342-bb12-4fdf-bad0-de87862d6b8e&utm_campaign=COM_DailyData_Tue_25_KW34_FR

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