"Fed Mouthpiece": Powell Maintains Flexibility as Factors Influencing Rate Cut Decisions Shift

According to a report by Jinse Finance, "Fed mouthpiece" Nick Timiraos stated that Powell sidestepped a pointed question about a possible rate cut in July, refusing to rule out any possibilities four weeks ahead of the policy meeting. His overall comments offered little indication that he is preparing for a rate cut this month. Excessive focus on July (at least today) is inappropriate, as it may obscure more subtle shifts in his and others' recent remarks. After the Liberation Day tariffs, there was speculation that price increases could be so significant that a substantial weakening of the labor market would be required before a rate cut. However, recently, with the suspension of tariffs and early (perhaps premature?) inflation readings not showing any meaningful impact, Powell has hinted that if inflation is not as concerning as feared, rate cuts could resume.