"Fed mouthpiece": Powell remains flexible, rate cut decision factors change
2025-07-01 17:05:15
On July 2nd, "Federal Reserve mouthpiece" Nick Timiraos said Powell sidestepped a pointed question about July (rate cuts), refusing to rule out any possibility four weeks before the policy meeting. His overall comments give little indication that he is preparing for a rate cut this month. The "excessive" focus on July (at least today) is inappropriate, and it may mask more subtle changes in his and others' rhetoric in recent weeks. In the wake of the Liberation Day tariffs, there is speculation that price increases could be so large that a substantial weakness in the labor market would be required for a rate cut. But recently, with the pause in tariffs and the early (possibly premature?) The inflation readings did not show a meaningful impact, and Powell hinted that interest rate cuts could resume if inflation is not as bad as feared.
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