This is via Nick Timiraos at the Wall Street Journal, his FOMC preview, in brief:
- Fed officials expect they will need to resume lowering interest rates eventually—they just aren’t ready to do it this week.
- The questions dividing them center on what evidence they need to see first, and whether waiting for that clarity turns out to be a mistake.
- The Fed was united when officials paused cuts this year after tariffs raised fears of renewed inflation. But with tariff-related price hikes proving milder than feared and signs that hiring may be softening, officials are now fractured into three camps over whether to resume cuts
- The focus will be whether Powell offers any hint of a September rate cut in his press conference Wednesday afternoon, and whether in the coming days and weeks his colleagues begin laying the groundwork for a cut at their next gathering.
