Jerome Powell's First Comments Post-Rate Cut: What to Expect

Fed's Post-Rate Cut Stance

• 💡 Jerome Powell is expected to reiterate the Fed's concern for the labor market, framing the recent rate cut as a precautionary measure or risk management move.
• 🎯 Future interest rate decisions will remain data-dependent, continuing the established approach rather than introducing a new one.

Internal Fed Dynamics and Dissent

• 📌 The recent lack of dissent at the Fed meeting, apart from Mr. Myron, suggests a show of solidarity and a unified message against external pressure.
• ⚠️ Even dovish members like Bowman reportedly prioritized the Fed's independence over political influence, signaling a "Fed first, Trump later" stance.

Balancing Inflation and Unemployment

• 📊 Currently, the Fed is more concerned about risks to the unemployment rate than inflation, viewing inflation from tariffs as a temporary, one-off measure.
• 📈 They will await incoming data to confirm this assessment, but the immediate focus is on the labor market mandate.

Key Fed Speakers and Market Focus

• 🎤 Michael McKee is particularly interested in Jerome Powell's remarks to set the tone for other Fed speakers this week.
• 🔍 The market will also be watching the Treasury's sale of two-year notes for appetite in US bonds.
• 🗣️ Fed Governor Michelle Bowman's earlier speech urged decisive action to lower rates to support the sagging labor market.