This week Fed Chair Jerome Powell refused to say when, or if, the Fed would cut interest rates, New York Fed President John Williams said he needed more data, and Fed governor Chris Waller merely acknowledged a cut was “getting closer." But if the Fed were truly data-dependent and trusted its own forecast, it would be comfortable cutting interest rates now. As a result, interest rates that looked appropriate a year ago now look too high. High interest rates haven’t slowed growth much because so many homeowners and businesses locked in rates when they were low. Right now, odds are the Fed won’t cut in two weeks but will signal it is ready to do so in September.

Source: Wall Street Journal July 18, 2024 13:42 UTC