Inflation's still above 3% (headline and core)... and SuperCore is still above 5%... and unemployment rates remain near the lowest deciles in US history...
Does that really sound like a time for The Fed to cut rates? According to the talking heads on CNBC and the market - the answer is yes.
But according to The Fed's statement, no!
The problem that Fed Chair Powell has is that September is his next option - which is precariously close to the election (the November FOMC is two days after the election). The market is pricing a 78% chance of a first cut in September...
So given today's exuberance around a dip in inflation, will Powell drop a hint or reassure that they are data-dependent... and completely apolitical...
Given the hawkish nature of the dotplot, we would expect Powell to jawbone us back to a post-CPI dovish shift... "Remember, the dots are not a forecast" or some such bullshit...
Watch Powell's press conference live here (due to start at 1430ET):
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