Nick Timirus He says Today’s jobs report wasn’t alarming enough to put a July rate cut on the table (5% pricing) but it does say it could open up a real debate about September.
The June jobs report will make the July Fed meeting more interesting because there may be – for the first time all year – a real debate about whether to cut interest rates at the *next* meeting (in September).
The truth is that the Fed will need to drop some stronger hints about a rate cut, but it is also highlighting next week’s CPI report as a key variable ahead of its July 30-31 meeting.
The Fed’s policy discussions are stagnant, because officials want to be clear about their decisions. As a result, policy meetings tend to focus as much on what officials should do next as on the results of the current meeting.
This means that the main focus at the July meeting will be on whether and how the committee will signal its openness to cutting production in September.
Market estimates indicate a 79% chance of a rate cut at the September meeting.