They’re looking for three straight 25bp cuts in Sep, Nov, Dec, and then two more next year to bring rates down to 3–3.25%.
The weak July jobs report, especially the nasty downward revisions, probably already pushed Fed leadership towards cutting.
Expect Powell will shift from 'we can wait and see' (July FOMC) to 'we’re ready to manage risks on both sides.'
Powell likely to underline that the labor market is softening and that tariffs are just a one-off price hit, not sticky inflation.
He won’t directly say 'we’re cutting in September,' but he’ll make it pretty clear he’s leaning that way.
Expect a walk-back of some 2020 changes
Dovish tilt: If he sounds even more alarmed about jobs or hints that cuts are coming soon.
Hawkish tilt: If he balances risks evenly or points to still-loose financial conditions as a reason not to rush.
Goldman: Powell Likely to Back Cuts but Stops Short of a Clear Signal
- Powell is expected to hint at supporting a September cut without committing, while the Fed prepares to roll back parts of its 2020 framework.
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