The Federal Open Market Committee (FOMC) statement is due at 1400 US Eastern time on Wednesday, July 31, 2024
Federal Reserve Chair Powell's press conference follows a half hour later.
Via Scotia
The FOMC should tentatively have greater confidence that this isn’t quite another one of those prior false hope periods for low inflation.
- US GDP growth has clearly slowed over H1 from 2023H2
- the noninflationary speed limit to growth has probably picked up with population growth and smoothed productivity trends
- Employment growth has cooled while the breakeven rate of job growth has probably moved higher due to population growth
If this narrative is wrong, then it could be wrong if Chair Powell’s press conference is more explicitly dovish than what he has said to date which is to signal rising confidence but not enough just yet.
It could also come through statement tweaks. Watch the opening paragraph and whether “there has been modest further progress” toward achieving the 2% inflation target or something that signals more confidence. Keep an eye on whether the third paragraph’s reference to the Committee holding off on rate cuts “until it has gained greater confidence” that inflation is moving toward 2% is strengthened to signal that this is being achieved.
