SUMMARY OF FED CHAIR POWELL'S COMMENTS (7/2/24):
1. The trend of disinflation appears to be resuming
2. Need to be more confident before reducing rates
3. Fed doesn't see 2% inflation "this year or next year"
4. Budget deficit is very large and unsustainable
5. 4% unemployment is still a very low unemployment rate
6. Moving to fast creates risk of inflation returning
The Fed needs more data before rate cuts can begin.
It's clear that the Fed will continue their "meeting by meeting" approach.
While markets are expecting 2 rate cuts this year, the Fed's latest guidance says 1 cut is coming.
The next few months are crucial.
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