#FOMCWatch

🔍 The Last Context

– In its last meeting (June 17-18), the committee decided to keep the interest rate at 4.25%-4.50%; the meeting minutes showed a division among members about when to cut rates, with the market anticipating a possible cut in September and no consensus on a July cut.

– The latest employment data showed the addition of 147,000 jobs in June and a decrease in unemployment to 4.1%, reducing the likelihood of a rate cut in July.

– The decline in oil prices and moderate inflation led some members of the Fed (including Michelle Bowman) to hint at a possible July cut, but the majority lean towards postponing the cut to September.

📈 Market Expectations

– The market expects the monetary policy to remain unchanged in July, with higher odds for the “dovish option” in September.

– Goldman Sachs forecasts suggest the possibility of starting cuts in September, with reductions of 25 basis points later on.

🎙️ What are we watching for in the next statement?

1. The tone of the statement: Will it be hawkish (warning against inflation) or dovish?

2. Any changes in inflation, growth, and economic activity forecasts (dot plot).

3. Journalists' questions for Fed Chair Powell regarding inflation, unemployment, and the effects of trade agreements.