US Weekly: Fed inching closer to rate cuts

Ahead of the Fed’s annual Jackson Hole Symposium, which kicks off late next week, markets are still wholly convinced that the Fed will cut rates by 25bp at the upcoming FOMC meeting in September and follow that up with at least one other cut in October or December. We suspect that, as he did in his post-FOMC press conference in late-July, Fed Chair Jerome Powell will caution that a modestly restrictive policy stance remains appropriate. Nevertheless, the near-stagnation in payrolls employment gains in recent months mean that, even though the unemployment rate hasn’t really risen, a September rate cut now looks like the most likely outcome.