FOMC June Meeting Minutes Key Takeaways: Watchful Waiting to End in Summer, Rate Cut in September Possible

July 9th, Focus of the Federal Reserve June Meeting Minutes: · Probability of a July Rate Cut: Both Powell and Bowman, who were appointed during the Trump 1.0 era, have signaled that they will contemplate a rate cut at the July meeting, and the impact of tariffs on prices may be of a transient nature. · End of the Watchful Waiting Period in Summer and Likely Rate Cut in September: The meeting minutes may imply that "the rate path will hinge on the data released in June, July, and August," and the "watchful waiting" period may conclude at the end of summer. The minutes may indicate that the Committee anticipates having the requisite data to make a rate cut decision prior to the end of summer. If the conditions align with expectations, this will reinforce the market's expectation of a rate cut in September. · Lowering the Threshold for Rate Cuts: The June meeting minutes of the Federal Reserve may exhibit a more dovish tone. Chairman Powell tended to employ neutral language during the June meeting, but the minutes may better reflect what Powell did not explicitly state: the threshold for a rate cut is on the decline. · Clues of Internal Dissent: Among the 19 officials on June 19th, 7 believed that there was no need for a rate cut this year, 2 expected one rate cut, 8 believed in two rate cuts, and 2 expected three rate cuts. Analysts will seek clues that led to this divergence. What supported the views of the 7 Fed officials who firmly believe that there will be no rate cuts at all in 2025. · Dual Mandate Concerns: Previous Federal Reserve economic forecasts showed that the pace of price increases will accelerate for the remainder of this year. However, in 2026, even though interest rates are expected to decline, the rate of price increase will once again decelerate. Additionally, there is concern regarding whether there is a significant concern about the strength of the labor market. (Jinshi)