「Fed Speak」: Powell Maintains Flexibility as Rate Cut Considerations Shift

BlockBeats News, July 2nd, in the "Fed's Megaphone" Nick Timiraos stated that Powell avoided a pointed question about July (rate cut), refusing to rule out any possibilities in the four weeks leading up to the policy meeting. His overall comments hardly indicated he was preparing for a rate cut this month.

The "excessive" focus on July (at least for today) is inappropriate and may overshadow the more subtle shifts in his and others' remarks in recent weeks. Following the tariff truce at the G20 Summit, there was speculation that the price increase might be so large that a substantial labor market softening would be needed for a rate cut.

However, recently, with the tariff pause and early (perhaps premature?) inflation readings not showing a meaningful impact, Powell suggested that if inflation is not as concerning, a rate cut might be back on the table.