Wall Street is currently eyeing September as the most likely time for the first rate cut, based on futures data. The odds of a rate cut in September have significantly increased following the release of the May Consumer Price Index (CPI). However, for this scenario to materialize, inflation will need to continue its downward trend in the upcoming months.
Officials from the Federal Reserve often stress that their decisions are data-driven, with conclusions about the state of the economy being drawn from trends observed over several months. It remains uncertain whether the factors that led to higher-than-expected inflation earlier this year are still present, but the May CPI figures have provided some relief.
Following the Federal Reserve's meeting, Federal Reserve Chair Jerome Powell is expected to address questions regarding the timing of a potential rate cut during his post-meeting press conference scheduled for 2:30 pm ET.
