Follow live coverage of the July FOMC meeting and Chairman Jerome Powell’s news conference.
Last Updated:
July 31, 2024 at 3:06 AM EDT
Rates in Focus
The Federal Reserve most likely won’t lower interest rates on Wednesday, but it could tee up a September cut—or pour cold water on the market’s hopes.
The Fed’s policy making body will publish a statement and interest-rate decision at 2 p.m. ET today. Fed Chair Jerome Powell will deliver remarks and answer questions at a news conference beginning at 2:30 p.m.
Follow the news live below.Share
Key Events
7 hours ago
What to Expect From Powell and the FOMC
Latest Updates
7 hours ago
What to Expect From Powell and the FOMC
The Federal Reserve most likely won’t lower interest rates on Wednesday, but it could tee up a September cut—or pour cold water on the market’s hopes.
The Federal Open Market Committee will conclude a two-day meeting on Wednesday. The Fed’s policy making body will publish a statement and interest-rate decision at 2 p.m. ET. Fed Chair Jerome Powell will deliver remarks and answer questions at a news conference beginning at 2:30 p.m.
The FOMC has held the federal-funds rate target at a range of 5.25% to 5.5% since July 2023. Now, decelerating inflation and a normalizing labor market have officials looking to thread the needle and deliver a rare soft landing for the U.S. economy.
The committee next meets on September 17-18, which is when investors are anticipating a change. What policymakers and Powell say about September will determine markets’ reaction on Wednesday.
According to interest-rate futures market pricing, the odds of a quarter-point rate cut in September sit at roughly 88%, while markets see a 12% chance of a half-point cut. Bond yields have come down significantly since the spring, as those rate-cut probabilities have climbed.
The FOMC’s post-meeting policy statement on Wednesday will be critical to watch, as it could include wording tweaks that signal a September interest-rate cut is in the cards. Fed watchers and investors will also be paying close attention to Powell’s news conference for further confirmation—or for clues into the committee’s thinking about what could come after a first rate cut.
“A statement change would suggest broad consensus and high conviction that September is the time to lower rates,” wrote Jonathan Pingle, chief U.S. economist at UBS. “A signal at the press conference would suggest something short of that. Ambiguity in the press conference would suggest the participants lack consensus and conviction, and Chair Powell may have more convincing to do if he wants to lower rates at the September FOMC meeting.”
After June’s FOMC meeting and in public remarks since, Fed officials have noted inflation has made progress toward the Fed’s 2% annual target and a labor market in better balance. Should those trends continue, it could be time to ease off of restrictive monetary policy—before economic growth slows too much.
But Powell and others have said they first need to see more encouraging data to be sure. “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” the FOMC’s post-June meeting statement reads.
Measures of inflation in the U.S. came down rapidly for most of 2023, before a resurgence in early 2024 postponed any of the Fed’s rate-cut plans. Data for May and June suggested a return to slowing price growth, with a pair of monthly readings back on track to reach the Fed’s 2% annual inflation target. The consumer price index was essentially flat in May, then declined slightly in June.
July and August labor-market and consumer price index data will be available before the September meeting, and might determine whether policymakers have the confidence they’re seeking to change interest rates then.
This Friday, the Bureau of Labor Statistics is expected to report an increase of 175,000 nonfarm payrolls in July, after a 206,000 gain in June. The unemployment rate is expected to remain unchanged at 4.1%.
Powell’s speech from the Kansas City Federal Reserve’s annual Jackson Hole Economic Symposium in late August will be another high-profile chance to lay the groundwork for any coming policy shift.
Fed officials will also publish their quarterly Summary of Economic Projections after the September meeting, which could help frame the path of interest rates in the rest of 2024—the FOMC will also meet in November and December—and into 2025.
“Powell has called the first move ‘consequential,’ suggesting that this will be a series of cuts,” wrote Joseph Kalish, chief global macro strategist at Ned Davis Research. “Powell has said that starting and stopping would not look good.”
Kalish expects a September cut to be followed by another rate decrease before the end of this year, then more cuts in 2025.
It’s a busy few days for central banks across the globe. The Bank of Japan will also conclude a meeting on Wednesday, as its policy moves in the opposite direction from the Fed. Markets are pricing in a rate increase and economists also expect a reduction in the BoJ’s bond-buying program. The Bank of England publishes a rate decision on Thursday, with markets pricing in about coin-flip odds of a quarter-point cut. The European Central Bank lowered its interest-rate target in June and next meets in September.