We conclude that the latest FOMC meeting announcement provides some insight into the path towards a September rate cut. The FOMC statement, which reflects the tone of improvement in inflation and the fact that job growth has somewhat moderated, shows encouraging signs.
The highlight came in the FOMC conference, where Fed Chairman Jerome Powell provided further insights and discussed the possibility of a September rate cut in the next meeting. The overall discussion and Q&A session were more neutral. The Fed is still data-dependent, and all options are on the table. That’s Powell’s style.
With the September cut possibility alive, the recent pullback in equity could see relief support as investors turned their attention to Friday’s job report and incoming earnings report.
Till then, volatility is our neighbour.
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