Will the FED Confirm A September Rate Cut This Week?

The FED has been trying to avoid any rate cut hints at all costs, leaving the USD in a no man’s land, with USD traders following every data release and trying to price it in. But, most major central banks have already lowered rates once or twice, with the Bank of England being the next one to cut rates later this week.

Nick Timiraos, a noted Fed watcher from the Wall Street Journal, said over the weekend that he is not expecting the FED to confirm it, but rather hint at a rate cut in September. However, this would still send the USD lower, although not as quick as an official commitment, which would send EUR/USD above 1.10.

Fed Preview by Nick Timiraos 

Over the weekend, Nick Timiraos has released his analysis on the Federal Reserve’s upcoming decisions, offering no clear indication of an impending rate cut. Instead, Timiraos suggests that the Fed may prepare the market for a potential cut in September without committing to it. The prevailing market sentiment already anticipates a rate reduction in September, with a slight possibility of a 50 basis point cut. Timiraos attributes the Fed’s newfound openness to cutting rates to three main factors: improved inflation data, signs of a cooling labor market, and a reassessment of the risks of allowing inflation to remain high, which could lead to unnecessary economic weakness.

While major policy changes are unlikely to be explicitly stated, even subtle hints will be seen as confirmation by the market, which is keenly aware of the Fed’s awareness of current market pricing. Conversely, the Fed might downplay the near-certainty of a September rate cut to maintain flexibility, especially in light of recent strong GDP figures.

EUR/USD Live Chart

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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