00:00 Speaker A
Ali, let’s start with you. You are following some breaking news here. Powell expected to say that the Fed can wait on rate cuts. What do we know?
00:14 Ali
Yeah, so we are getting some of those prepared remarks from Jerome Powell. He said, quote, for the time being we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance. So this largely repeats what he said in that post decision press conference last week. We do know that there are several FOMC members, including Fed Governor Chris Waller, Michelle Bowman, who have advocated for more rate cuts, saying that inflation has been decelerating and that they are in a position to cut rates. But Jerome Powell has consistently said that he wants to see more economic data. He wants to see how the tariffs are going to impact the economy, how that will have an impact on GDP growth, inflation. And even with those fed projections, which are still pricing in two rate cuts by the end of this year, there seems to be more divergence among some of those members. We have eight calling for two rate cuts, but seven FOMC officials think that we will continue to remain on hold there. Along with those rate interest rate projections, we also saw that they expect slightly higher inflation, slightly lower growth, and a slight edge higher in the unemployment rate. So that suggests potentially a more stagflationary environment heading into the back half of the year. Of course, Jerome Powell is going to be grilled on all of this. He has faced a lot of pressure, especially from President Trump to cut interest rates. But we still have a lot of unknowns out there in the economy and we have that Fed meeting coming up in July, and then in August, we’re going to have Jackson Hole as well. So still a lot more market moving events to track here.
