Fed Policy

As the July meeting approaches and Powell testifies in front of Congress at this week’s Humphrey Hawkins hearings, Powell and the rest of the Committee should keep the door open to a cut at the July meeting.

While still no one is willing to explicitly say it's time to go, the Fedspeak leaned dovish this week.

With all of the softening in the labor market, it’s time for the Fed to actively discuss starting the process of rate normalization.

In this piece, we take a deeper dive into the finer details of the national accounts to gain some insight into how exactly monetary policy is restricting investment.

If the next month delivers either another round of soft inflation data, or a weak jobs report, the FOMC should be prepared to deliver a cut in July. If they continue to delay beginning rate cuts to gain certainty, they should consider a 50 bps cut for their first cut.

With the labor market still strong and April inflation representing an improvement over Q1 but still not good enough, the committee is in “looking for confidence” mode.

Just a bit of Fedspeak after this week's FOMC meeting, none of it particularly revealing.

The data is consistent with those hoping for a soft landing—and soft landing cuts.