"Federal Reserve Mouthpiece": Powell Maintains Flexibility, Factors for Rate Cut Decision Have Changed

ChainCatcher news, "Fed mouthpiece" Nick Timiraos stated that Powell dodged a sharp question regarding the July (rate cut), refusing to rule out any possibilities four weeks before the policy meeting. His overall comments hardly indicated that he was preparing for a rate cut this month.

The "excessive" focus on July (at least today) is inappropriate, as it may overshadow the more subtle shifts in his and others' remarks in recent weeks. After the Liberation Day tariffs, there was speculation that price increases could be so significant that a substantial weakening in the labor market would be needed for a rate cut. However, recently, with the tariffs paused and early (possibly too early?) inflation readings not showing meaningful impacts, Powell hinted that if inflation is not as concerning, a rate cut might be back on the table.