Markets are keeping an eye on a possible interest rate cut in September. It would be the first since the emergency easing at the beginning of the Covid-19 pandemic.
Most Fed officials noted at their July meeting that “if data continued to be broadly in line with expectations, it would probably be appropriate to ease monetary policy at the next meeting,” a summary of the meeting said. “…Participants felt that recent data had strengthened their confidence that inflation was moving sustainably toward 2 percent,” it continued.
“Several (meeting participants) noted that recent progress on inflation and the increase in the unemployment rate had provided a plausible argument for a 25 basis point reduction in the target range at this meeting or that they could have supported such a decision,” the summary said.
One basis point corresponds to 0.01 percentage points (pp), so a reduction of 25 basis points would correspond to a quarter of a percentage point.
“Regarding the inflation outlook, participants concluded that recent data had strengthened their confidence that inflation was moving sustainably towards 2 percent,” the summary said.
“Almost all participants noted that the factors that contributed to the recent disinflation are likely to continue to exert downward pressure on inflation in the coming months,” it added.
Fibre2Fashion News Desk (DS)
