The odds of a rate cut during the Fed’s next Federal Open Market Committee (FOMC) meeting on July 30 are getting a boost following comments from Fed Chair Jerome Powell at the European Central Bank forum in Portugal.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Powell said he “can’t say” if July is too early to consider a rate cut, adding that the decision would ultimately be based on economic data. The odds of a 25 basis points reduction to the federal funds rate are now at 23.3% following his comment, up from 18.6% yesterday and 18.6% a week ago.
Trump Pressures Powell to Lower Rates
On Monday, President Trump sent Powell a handwritten letter, pressuring him to lower the federal funds rate and blaming him for costing “the U.S. a fortune.” The letter is just one of many instances of Trump demanding a lower rate in order to secure lower interest payments on U.S. debt.
When asked about Trump’s persistent requests, Powell said that he will remain focused on doing his job and that the Fed should stay out of political issues. The Fed is intended to be an organization with a dual mandate of keeping inflation around 2% and maximizing employment. It’s also supposed to be independent of political pressures.
Track the federal funds rate and other key economic metrics with TipRanks’ Economic Indicators Dashboard.
