After Powell's speech, it's time for Waller!
With the upcoming Federal Open Market Committee (FOMC) meeting, the remarks of Powell and other voting members are crucial this week. Currently, Powell continues to be "dovish," hinting at a rate cut. Several Fed officials, including Chris Waller, will also speak intensively this week to assess inflation and consider whether to signal a rate cut
As the Federal Reserve FOMC monetary policy decision approaches, Federal Reserve officials will soon enter a "quiet period." According to Federal Reserve regulations, these officials are not allowed to make any comments on monetary policy from this Saturday (July 20) until the Friday after the end of the FOMC meeting on July 31.
Therefore, market attention is focused on the statements of Federal Reserve Chairman Powell and other voters this week, as they will assess the slowdown in inflation and consider whether to signal a rate cut.
Market analysts point out that Powell hinted at a rate cut in his latest speech yesterday. He continued to show a "dovish" stance, praising the "quite good" recent three inflation data and stating that there is no need to wait for inflation to fall to 2% before starting rate cuts.
Powell emphasized, "The first-quarter economic data did not strengthen our confidence that inflation will fall to the 2% target, but the three data points in the second quarter, including last week's data, have indeed somewhat strengthened our confidence."
As the inflation rate gradually approaches the 2% target, concerns arise in the market about how long the strong momentum in the U.S. job market can last. Against this backdrop, Federal Reserve officials may use these last few days to hint at the urgency of a rate cut or explain why recent data still does not support a shift to a more accommodative monetary policy.
Federal Reserve officials speaking this week include Governor Adriana Kugler, who will speak on Tuesday afternoon local time; Governor Chris Waller, who is scheduled to attend an event on Wednesday morning; New York Federal Reserve Bank President John Williams, who will make an appearance overseas on Friday; and Richmond Federal Reserve Bank President Thomas Barkin, who will speak on Wednesday morning.
Waller, as an important voice in the inflation debate, his views are particularly worth noting. Waller is generally considered a "hawk," and he stated at the end of May that he would like to see "several months of good inflation data" to support a rate cut. However, since his last monetary policy speech, the Personal Consumption Expenditures Price Index (PCE) has dropped from 2.7% in May to 2.6%, with further declines expected.
Analysts at Citigroup predicted in a report last Friday, "We expect a strong signal to be sent in July, indicating that the Federal Reserve will begin cutting rates at the upcoming meeting," and if the economic situation develops as expected, action may be taken in September