TechFlow, July 9 — Jinshi Data released key points to watch in the Fed's June meeting minutes
- How likely is a July rate cut: How much support will Waller and Bowman, both appointed during Trump 1.0, receive? Both have indicated they are considering a rate cut at the July meeting, and that the impact of tariffs on prices may be temporary.
- Wait-and-see period ending in summer, possible September cut: The minutes may suggest that "the path of rates will depend on data released in June, July, and August," indicating the "wait-and-see" phase could end by late summer. The minutes might indicate the committee expects to obtain sufficient data before summer ends to make a decision on rate cuts. If so, this would strengthen market expectations for a September cut.
- Lowering the bar for rate cuts: The Fed's June meeting minutes may sound more dovish. While Powell leaned toward neutral language during the June meeting, the minutes could better reflect what Powell did not explicitly state: the threshold for rate cuts is decreasing.
- Clues of internal disagreement: Among 19 officials in June, 7 believed no rate cuts were needed this year, 2 expected one cut, 8 favored two cuts, and 2 anticipated three cuts. Analysts will look for clues behind this divergence. What supports the view of the seven Fed officials who believe there will be no rate cuts at all in 2025?
- Concerns over dual mandate: Previous Fed economic projections showed inflation accelerating over the remainder of this year, but slowing again in 2026, even as rates are expected to decline. Also watch for any serious concerns about the strength of the labor market.
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