Powell says he will not send any signal on exactly when rate cuts might commence

By Greg Robb

Fed chair condemns attack on Trump

Federal Reserve Chair Jerome Powell on Monday said he would not signal at what meeting the central bank might make the first cut to its benchmark interest rate.

"Today, I am not going to be sending any signals, one way or the other, on any particular meeting. So, just to ruin the fun," Powell said.

The Fed has a meeting in late July and another in mid-September. Traders in derivative markets widely expect the central bank to wait until September to cut rates, but they were listening closely to Powell's remarks at the Economic Club of Washington, D.C., to try to discern whether he was unhappy with the market's pricing.

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Some economists think the Fed might move as soon as this month.

Powell said the Fed was taking a "meeting by meeting" approach.

For months, the Fed has said it needed greater confidence that inflation was coming down to its 2% target before it would cut rates.

Powell said that the last three readings in the second quarter, including last week's data, "do add somewhat to confidence."

The central bank has kept its benchmark rate in a range of 5.25% to 5.5% since last July.

Economists at Goldman Sachs warned Monday that the U.S. economy might be on the precipice of a sharp downturn.

Powell, however, downplayed the risks of a deep recession. He said a "hard landing," another name for a recession, was not the "most likely" or even a "likely" scenario.

Some Fed officials have in the past spoken about chances of a shallow recession.

A soft consumer-price index reading last week has raised expectations in the markets that the Fed could be ready to move.

Separately, Powell condemned the assassination attempt on former President Donald Trump, saying that political violence has no place in America. He declined to talk about the market reaction to the shooting, which happened Saturday afternoon during a political rally in Pennsylvania.

"It is just a sad day," Powell said, adding he was "grateful" that the injuries to Trump were not more serious.

Powell refused to answer when asked if he wanted to serve another four-year term at the Fed. His second term ends in mid-2026.

Trump has said he would not renominate Powell for a third term.

-Greg Robb

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07-15-24 1349ET

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