Fed Hints at Rate Cuts in September

Washington, D.C., August 1, 2024--Federal Reserve chair Jerome Powell said this week that officials could cut interest rates at their meeting in September.

“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. “A reduction in the policy rate could be on the table as soon as the next meeting in September.”

The Wall Street Journal reports that, “Officials made two important changes to their policy statement that acknowledged recent progress in their inflation fight and that pivoted closer to lowering rates without making any explicit commitment. They described inflation as ‘somewhat elevated,’ a notable downgrade. And they underscored that this progress meant they could treat both sides of their mandate--to maintain low and stable inflation with sturdy labor markets--on a more equal footing for the first time since they rapidly raised rates starting two years ago to combat high prices.

“While Wednesday’s decision to leave rates in a range between 5.25% and 5.5%, a two-decade high, was unanimous, Powell suggested that at least one official had argued in favor of lowering rates at this week’s two-day meeting.”