In March 2022, the Federal Reserve embarked on one of its most aggressive rate-tightening cycles. Since then, markets have been jolted by several false hopes around an expected policy “pivot” to rate cuts. However, while the U.S. central bank has long since stopped its rate-hike spree and kept its benchmark steady for a year, a rate cut has been elusive.
However, at the annual Jackson Hole Symposium earlier this month, Fed Chair Jerome Powell virtually set the table for a rate cut at the next meeting in September by saying, “The time has come for policy to adjust.” That’s perhaps as close as Powell could have come to directly suggesting a rate cut is likely at the upcoming Federal Open Market Committee (FOMC) meeting.
