Jinshi published an opinion article stating that the upcoming FOMC minutes will reveal why the committee lowered its expectations for a rate cut in 2024 while keeping economic growth and unemployment expectations unchanged. The unexpected rise in inflation in the first quarter of this year shook policymakers' confidence in the inflation path, but after CPI and PCE showed a clear slowdown in May, the inflation forecast provided by the Fed in June may be outdated. The minutes may show that participants' judgment on the balance of risks is balanced.
The speed at which labor market conditions deteriorate is increasingly important for the timing of the first rate cut. Although FOMC members left their unemployment rate forecasts unchanged, the minutes will show they are increasingly concerned that the labor market could cool quickly, opening the door to two rate cuts this year.
