Update, July 29, 2024: This article has been updated to include new information as of Monday.

Lower interest rates 🍨are on the hori꧂zon, but they’re probably not here just yet. 

Officials at the Federal Reserve are widely expected to hold the central bank’s key interest rate steady when they meet Wednesday. Despite some economists saying July is the right time to cut, financial market participants priced in an outside chance Friday—just 4.7%, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

Inflation reignited in the first quarter, but has since continued its descent, Friday’s report on the F༒ederal Reserve’s preferred meas🌞ure of inflation showed. Some economists said t🗹he central bank will hold one more meet𓃲ing to ensure inflation won’t reaccelerate. 

“But with growth slowing and unemployment already creeping higher, the economy seems to be increasingly vulnerable, and an additional exogenous shock—such as a spike in geopolitical conflict or a selloff in equity and credit markets—could tip the economy over the edge,” wrote Moody's Analytics Economist Justin Begley. 

“Keeping rates this high for too long could meaningfully damage t🎐he labor market and further shake business and consumer confidence, all of which would be bad for personal income,” he wrote.

Will Fed Officials Signal a September Rate Cut?

Those factors could lead the Federal Open Market Committee to be more explicit about whether it will cut the fed🌜 funds rate at its subsequent meeting in September, as observers widely expect. 

In recent speeches, Fed officials have said they’re 澳洲幸运5官方开奖结果体彩网:encoꦿuraged by data showing inflation has fallen steadily in recent months, but that they’re waiting for more data befor𒈔e committing to cutting rates. 

“We expect the Fed to keep its policy rate unchanged in July while signaling progress on reducing inflation has resumed,” Michael Gapen, 🐬chief U.S. economist at Bank of America Securities, wrote in a commentary. “The Fed is optimistic that cuts are likely in the near term, but we do not think it is willing to signal September is a done deal. It could happen, bu🅘t it would depend on the data.”

Some economists have said they expect to get additional insight from 🍷the annual Jackson Hᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚole Economic Symposium in mid-August.

A Cut Would Be A Turning Point For Economy

Should the Fed hold rates steady on Wednesday, September’s meeting could be a turning point in the Fed𒆙’s battle against in꧅flation.

It would be the first reduction in interest rates since the onset of the pandemic in 2020. The Fed held 𝄹the rate at near zero during the pandemic to stimulate the economy with easy money, then ratcheted it up beginning in March 2022 to slow the🐲 economy and stifle inflation.

In July 2023, the Fe🔯d raised the fed fundಌs rate to its highest since 2001 and has held it there ever since. 

Over the past two years, the annual inflation rate as measured by the Personal Consumption Expenditures (PCE) price index has fallen to an annual rate of 2.5% from its recent peak of 7.1%, nearing the Fed’s goal of 2%. At the same time, the formerly red-hot labor market has cooled down, with the unemployment rate 澳洲幸运5官方开奖结果体彩网:ticking up to 4.1% fro💦m the 50-year low of🧸 3.4% it hit last year. 

Notably, Fed chair Jerome Powell has said he’s become equally concerned about ওthe job market as he is about inflation, suggesting that the Fed could soon start shifting away from inflation-fighting mode. The Fed uses monetary policy to 澳洲幸运5官方开奖结果体彩网:pursue its congressional mandate to keep inflation under control and the unemployment rate low.