FXStreet Summary: Preview of the FOMC Interest Rate Decision - Focus on Changes in the Statement

JIN10
2024.07.31 17:45
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This article compiled by Golden Ten is a preview of the Federal Reserve interest rate decision. According to the article, the market generally expects the Federal Reserve to keep interest rates unchanged, but there is also a small probability of the first rate cut. The article also mentions possible changes in the labor market, inflation situation, dual mandate, and rate cut signals. Chicago Fed President Charles Evans may become the first official to vote against the Fed's decision. Powell may further hint at the Fed's first rate cut in September during his speech

[Jinshi Compilation: Preview of the FOMC Interest Rate Decision - Focus on Changes in the Statement]

  1. Interest Rate Changes: The market generally expects the Federal Reserve to maintain interest rates for the eighth consecutive time, with a small probability of the first rate cut.

  2. Employment Market: The first paragraph of the statement may include the phrase "recently the unemployment rate has risen," while the description of "strong job growth, unemployment rate remaining at a low level" will not change.

  3. Inflation Situation: The description of progress in lowering inflation in the first paragraph of the statement may change from "moderate further progress" to "significant progress" or similar expressions; there is still considerable debate in the market on whether the Fed will continue to use "high" to describe the inflation situation.

  4. Dual Mandate: The description of the dual mandate in the second paragraph may become more balanced, changing from "risks to the employment and inflation goals have tended to become better balanced" to " are better balanced".

  5. Rate Cut Signal: The sentence in the third paragraph of the statement "it would be inappropriate to lower the target range for the federal funds rate until we are more confident that inflation will move up to 2 percent" may be expressed more positively, such as "once we are more confident that inflation will move up to 2 percent, the target range for the federal funds rate can be lowered".

  6. Voting Ratio: Chicago Fed President Charles Evans may become the first official in over two years to vote against the Fed's decision, with the market expecting him to support a rate cut at this meeting.

  7. Powell's Speech: Powell may deliver a speech similar to his congressional testimony, further hinting at the Fed's initiation of the first rate cut in September; he is expected to candidly but cautiously evaluate recent inflation data, acknowledging progress in lowering inflation while avoiding making any commitments

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