🚨🚨FOMC Minutes: Is a Rate Cut on the Way?

A development caught my attention in the minutes published today.

For the first time since 1993, two members (Waller and Bowman) voted explicitly in favor of a rate cut. This detail alone shows that the atmosphere within the Fed is changing.

Although the majority still sees inflation as the biggest risk, recent weak employment data is strengthening the markets' position. According to CME data, the probability of a 25 bp rate cut in September is still 85%.

I think Powell will not catch the markets off guard this time. The first cut will come in September, but in his statement, he will maintain an emphasis on inflation while using a “cautious” tone by signaling the slowdown in the labor market.