Federal Reserve officials are optimistic about the trend of U.S. inflation, but still need more confidence before deciding to cut interest rates.

According to the minutes of the meeting released on July 4, 2024, 交留进山君, B N B 0 0 0 7 8 9, Federal Reserve officials believe that a series of data show that inflationary pressures are gradually weakening, especially as retailers begin to cut prices in response to weak consumer demand. Nevertheless, they believe that more information is needed to ensure that inflation continues to move towards the Fed's 2% target.

Although inflation has fallen rapidly from its high in 2022, officials remain cautious about cutting interest rates too quickly. They pointed out that if interest rates are cut too early, it may lead to an increase in the unemployment rate. Some policymakers specifically emphasized that as the labor market gradually returns to normal, further reducing demand may lead to an adverse reaction in the unemployment rate.

The U.S. Bureau of Labor Statistics is expected to release a closely watched job market report on Friday, and economists expect a sharp drop in new jobs in June, which may further affect the Fed's decision.

In summary, the Fed indicated at its June meeting that they expect only one rate cut this year, far less than the three times previously expected by the market. Futures markets are currently pricing in a 70% chance of a rate cut in September, which would be the last policy decision before the presidential election.