Wall Street will be closely watching what is said at the post-meeting news conference on Oct. 29.
The Federal Reserve is expected to cut interest rates again when officials meet this week for the Federal Open Market Committee’s two-day policy meeting.
As monetary policymakers inch closer to the neutral rate—when interest rates are neither stimulative nor restrictive—the Fed is engaged in a balancing act to protect jobs and prevent a rekindling of the inflation flame.
The Fed will convene this month’s meeting on Oct. 28 and will announce the rate decision at 2 p.m. on Oct. 29.
In September, officials restarted their easing cycle, following through on the year’s first rate cut.
Investors are betting on a 98 percent chance of a back-to-back quarter-point reduction, data from the CME FedWatch Tool show.
The decision would bring the benchmark federal funds rate—a key rate that influences business and household borrowing costs—to a new target range of 3.75 percent to 4 percent.
Half of the participants at the September meeting also signaled further rate cuts this year, according to the minutes.
Because a rate cut is penciled in, Wall Street will be closely watching what is said at the post-meeting news conference on Oct. 29, according to Jay Woods, chief global strategist at Freedom Capital Markets.
“As the market tends to do, it is already focused on the next meeting,” Woods said in a note emailed to The Epoch Times.
“As of now, the path for one more cut at the Fed’s final meeting in December seems possible, and investors are hoping the message from this meeting makes it appear even more probable.”
The futures market suggests that the odds of an end-of-year cut stand at 98 percent.
Earlier this month, Powell signaled more easing ahead in response to a weakening labor market and the economic risks of waiting too long to make monetary policy less restrictive.
“There is no risk-free path for policy as we navigate the tension between our employment and inflation goals,” he said.
Powell also noted that the end of the institution’s three-year quantitative tightening program—a balance sheet reduction initiative—is looming.
“We may approach that point in coming months, and we are closely monitoring a wide range of indicators to inform this decision,” he said in prepared remarks at the National Association for Business Economics conference on Oct. 14.
But while the Fed has presented a conservative outlook on interest rates, a chorus of officials has expressed concern about cutting interest rates too quickly.
By Andrew Moran
