URGENT: Most Fed officials leaning towards rate cut in Sept – minutes

US Federal Reserve policymakers are leaning towards reducing interest rates at their next meeting in September, provided inflation continues to moderate, according to the minutes of their July meeting released on Wednesday.

The minutes of the Fed’s July 30-31 meeting say the “vast majority” of policymakers “observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.”

This would mark a reversal from the current benchmark rate of 5.3 per cent, a near-quarter-century high, which has remained unchanged for over a year.

Federal Reserve Chair Jerome Powell is expected to provide further clarity on the central bank’s plans during his highly anticipated speech at the Jackson Hole economic symposium on Friday.

A potential rate cut in September, just months before the presidential election, could introduce political pressure on the Fed. However, the central bank has consistently emphasised its commitment to making rate decisions based solely on economic data, independent of political considerations.

Attribution: Minutes of the Federal Open Market Committee, July 30-31, 2024

Subediting: M. S. Salama