“The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
Powell couldn’t have been any more precise in his annual address at Jackson Hole.
There’s no wiggle room. The Fed will cut rates in September. Even if the Fed had fully intended to pull the trigger next month, Powell could have given the Fed a backdoor, maybe something like, “The time MAY SOON come for policy to adjust.”
Soon signals September. May gives them an out.
But the Fed isn’t one-data point dependent. A strong jobs report for August or a disappointing CPI just days before the Fed’s September meeting won’t discourage Fed officials.
The Fed made its intentions crystal clear. It’s ready to start easing up on the monetary brakes.
