Following FED Chairman Jerome Powell's positive statements on inflation last week, September is considered certain for the first interest rate cut, while new statements came from FOMC member John Williams.
Speaking to the Wall Street Journal, Williams said the Fed is “getting close” to a point where it could start cutting interest rates but won't have enough data before the September meeting to prove inflation is on a sustainable path to 2%.
“Based on the data and what we have seen over the past three months (I will also include June) I think the data is getting us closer to the disinflationary trend we are looking for.
I would like to see more data to gain greater confidence that inflation is moving sustainably towards our 2% target. “We've got a few good months ahead of us now.”
Williams, who completely excludes the possibility of an interest rate cut in July, said: “Actually, we will learn a lot between July and September. We will get two months of inflation data. These will provide us with good data for September.” said.
Williams also stated that he did not accept concerns that bringing inflation to the FED's 2% target would be more difficult than reducing it from the peak to current levels, saying, “We actually saw a sharp decline in inflation.” said.
At its meeting on July 30-31, the FED is expected to keep interest rates constant within the range of 5.25-5.5 percent, which has been kept constant for a year. However, after Powell's latest statements, markets are pricing in a rate cut in September.
*This is not investment advice.
