The communications blackout period around the September 17-18 FOMC meeting is in effect (midnight, Saturday, September 7 through midnight, Thursday, September 19). If any Fed officials speak, it will not be about monetary policy. Even if it were not the blackout period, FOMC participants would probably say nothing to contradict expectations for a 25-basis point rate cut at the meeting, the first since July 2023 when the fed funds target rate reached its near-term peak of 5.25-5.50 percent.
The only piece of economic data likely to get more than passing attention in the week is the August CPI report on Wednesday at 8:30 ET. On the price stability side of the Fed’s dual mandate, getting inflation under control has been a challenge. Inflation measures are generally moving in the right direction but it has taken time to rein in price inflation for housing and non-housing services. Recent data suggest that the FOMC is nearly there, although further gains are generally incremental. It will take some months more before the 2 percent inflation objective is reached.
In the meantime, labor market data are now looking the most normal since the arrival of the pandemic against a backdrop of tempered economic expansion. Having seen the labor market rebalance and cool to sustainable levels, the FOMC will be willing to remove a little of the restrictive monetary policy currently in place.
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