FOMC Meeting: Why a September Rate Cut Looks Likely – And What Could Stop It

All eyes are on the Federal Reserve as the FOMC prepares to meet on September 16–17, ￰0￱ the federal funds rate currently set at 4.25%–4.50%, markets are pricing in a strong chance that policymakers will pivot toward ￰1￱ discussion is shifting from inflation control to concerns about a cooling labor ￰2￱ Chair Jerome Powell has already warned of “downside risks” to jobs, adding momentum to speculation that rate cuts are back on the table. Still, nothing is certain in the world of central banking, and upcoming economic data could prove ￰3￱ a September Rate Cut Looks Likely The case for a September cut has gained traction over the ￰4￱ Jackson Hole, Powell hinted that the Fed may need to step in as employment data weakens.

July’s payrolls rose just +73k, while unemployment ticked up to 4.2%. Inflation pressures have also eased, with headline CPI at 2.7% and PCE at 2.6%. The labor market has slowed consistently: NFP: +19k (May), +14k (June), +73k (July) ADP: +104k in July Job openings: 7.8M → 7.4M Jobless claims: ~230k weekly; continuing claims ~1.95M Wage growth is holding at +0.3% month-over-…