4 opportunities for the Federal Reserve to signal a rate cut – September a hot prospect

Snippet summary from BMO on opportunities ahead for the Federal Reserve to signal a September rate cut:

• the verdict is still out on the amount of signalling Powell is willing to provide on Wednesday
• there is enough uncertainty that we suspect there will be meaningful and tangible price action – most likely on the constructive side
• even if Powell stops shy of convincing the market that the Committee has pencilled in a cut for September, the Fed also has the FOMC Minutes release to convey the message of ‘cuts are coming’.
• Let us not forget the Aug 22-24 Jackson Hole conference about the effectiveness of policy and its implementation – an especially topical subject at the moment. It has also been a venue that has been used to offer a fuller explanation of a shifting policy outlook – the timing this year suggests this could once again be the case.

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On Wednesday, July 31, 2024 we get the Federal Open Market Committee (FOMC) statement at 2pm US Eastern time, followed by Powell’s press conference a half hour later.

Earlier:

• Deutsche Bank on the Fed – “market has jumped the gun on a dovish pivot”

• UBS says a Federal Reserve policy pivot is “on the horizon”
• Timiraos: Fed cut unlikely on Wednesday but officials wary of waiting too long
• Newsquawk Week Ahead: Highlights include FOMC, BoJ, NFP, BoE, ISM Mfg. PMI and OPEC+ JMMC

This article was written by Eamonn Sheridan at www.forexlive.com.