Jerome Powell Just Locked in a July Rate Cut
If he had any inkling to hold steady this month, his testimony needed to shake bond traders from their 100% certainty about easing. Instead, he only added to their resolve.
The question now is whether the central bank stops at just one.
Photographer: Andrew Harrer/BloombergFederal Reserve Chair Jerome Powell had a chance Wednesday to push back against both over-aggressive bond traders and Trump administration officials who were pounding the table for interest-rate cuts. He had the cover of not just a strong rebound in the U.S. labor market but also the backing of regional Fed presidents like Patrick Harker and Loretta Mester, who had already advocated this month for keeping the central bank’s lending benchmark unchanged.
Instead, in prepared remarks to U.S. lawmakers, he told the bond market and the president that a quarter-point rate cut is a sure thing at the end of the month.