The Federal Reserve is inching closer to cutting interest rates, signaling a rate reduction as soon as September if inflation continues trending downward and the labor market remains solid. Meanwhile, Fed officials left the policy rate unchanged at a 23-year high of 5.5 percent following the two-day policy meeting that concluded on Wednesday.
While no decisions have been made about future meetings, Fed Chair Jerome Powell signaled that a rate cut could be on the table as early as the September policy meeting. “The broad sense of the committee is that the economy is moving closer to the point at which it will be appropriate to reduce our policy rate,” Powell said on Wednesday.
The futures market has been signaling for a while that the Fed is likely to pull the trigger on a rate cut at the September meeting. A Fed policy pivot has become all but certain for Wall Street as inflation pressures soften and the U.S. economy shows signs of slowing.
