Senior officials from other central banks will attend, including Bank of Canada Governor Macklem, Bank of England Governor Bailey, and European Central Bank President Lagarde, who will speak at a panel discussion on Saturday. The attendance of these global officials underscores the intense international focus on U.S. monetary policy.

Job growth has slowed, but it remains consistent with tighter immigration policies, leaving uncertainty about the delicate balance between inflation risks and labor market resilience. The memo also raises emerging questions about tariffs, changes in immigration, and broader macroeconomic policies that cloud inflation outlooks.

As financial conditions remain generally accommodative and political pressures mount, Scotiabank warns that an early cut could politicize the Federal Reserve's independence, especially amid severe criticism from President Donald Trump. It added that the risks of premature easing could encourage unwise policies like protectionism, highlighting the high stakes as the Federal Reserve navigates its future path.

While markets are pricing in a rate cut in September, Scotiabank Economics expects Powell to maintain a prolonged pause, prioritizing more data and a considered conclusion for reviewing the Federal Reserve's framework rather than early easing.