Most Fed officials favour a rate cut in September if inflation continues to cool
benchmark interest rate at their next meeting in September as long as inflation continued to cool.
The minutes of the Fed's July 30-31 meeting, released Wednesday, said the «vast majority» of policymakers «observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.»
At the July meeting, the policymakers kept their benchmark rate at 5.3%, a near-quarter-century high, where it's stood since July 2023.
Wall Street traders had already considered it a certainty that the Fed will announce its first interest rate cut in four years when it meets in mid-September, according to futures prices. A lower Fed benchmark rate would lead eventually to lower rates for auto loans, mortgages and other forms of consumer borrowing and could also boost stock prices.
The minutes of the Fed's meetings sometimes reveal key details behind the policymakers' thinking, especially about how their views on interest rates might be evolving. Further guidance on the Fed's next steps is expected when Chair Jerome Powell (in picture) gives a highly anticipated speech Friday morning at the annual symposium of central bankers in Jackson Hole, Wyoming.
Most analysts think Powell will signal in his speech that the Fed has become confident that inflation is headed back to its 2% target and might even give some hint about how many rate cuts could happen this year. When he held a news conference after last month's Fed meeting, Powell had suggested that a broad range of policy moves
