The minutes of the Federal Open Market Committee (FOMC) meeting held on July 30-31 will be released on Wednesday, August 21, at 2:00 p.m. These minutes are significant as they may better indicate whether the Federal Reserve intends to begin cutting interest rates soon.
The July FOMC meeting was important as it marked the first time Fed Chair Powell acknowledged the prospect of a rate cut. The Fed discussed cutting interest rates at its most recent meeting if inflation continues to fall and they are certain it will remain around their 2% objective.
With inflation falling to 2.9% in July, the lowest level in over two years, there is growing talk of reducing interest rates sooner rather than later. The high unemployment rate may also compel the US Fed to cut the rate sooner to avoid a recession.
The July 31 FOMC Meeting minutes are expected to be dovish, indicating the possibility of rate cuts this year.
Another key event this week arrives on Friday with Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole Symposium, which is expected to be closely watched for further clues on the Fed’s plans.
Markets are already expecting a 0.25% rate cut in September, with some anticipating a larger 0.50% cut. The minutes are likely to support this view, showing that the Fed might be ready to lower rates. Recent comments from Fed officials suggest they are leaning towards rate cuts because of concerns about the economy and job market.
The FOMC Meeting Minutes, as well as Fed Chair Jerome Powell’s remarks at the Jackson Hole Symposium on Friday, are likely to affect market expectations. If Powell signals a rate cut on Friday, the focus will shift to the quantum of rate cuts in 2024. Overall, the FOMC minutes and Powell’s speech could significantly impact market expectations and movements from here on.