A bevy of tamer-than-expected inflation numbers over the past week has supercharged expectations that a Federal Reserve rate cut is ahead, but 𝔉Fed officials themselves are proceeding with caution.

Consumer and 澳洲幸运5官方开奖结果体彩网:wholesale inflation both came in lower than economists expected and the labor market is 澳洲幸运5官方开奖结果体彩网:showing signs of rebalancing. However, the Fed held its influential fed♈ funds rates at a 23-y🌃ear high for the seventh consecutive meeting earlier this week and downshifted its median expectations for rate cuts. These now narrowly predict just 澳洲幸运5官方开奖结果体彩网:one rate cut this year, as opposed t♐o the thr💎ee expected in their last projections.

Forecasters think the earliest the Fed might cut interest rates is in September, and that's only if data continues to show a softening economy.

Rate Cut Expectations For September Soar

Traders have upped their expectations of a rate cut, according to the CME Group’s FedWatch tool, which forecasts rate movements based on 澳洲幸运5官方开奖结果体彩网:fed funds futures trading data. Last week, traders were pricing in a nearly 50-50 chance that the F♛ed would cut interest rates in its September meeting. Now, that number sits at about 70%.

Investors also have🍌 high hopes for impꦅending rate cuts. The S&P 500 hit new highs in the wake of the inflation report and Fed meeting.

However, a September rate cut isn't set in stone. Economists say this week's data has 澳ꦉ洲幸运5官方开奖结果体彩网:kept hopes of a September rate cut a🐻live, but economic data will be vital to the timing.

Fed Officials Are Proceeding With Caution

In his press conference following the policy meeting this week, 澳洲幸运5官方开奖结果体彩网:Federal Reserve Chair Jerom♔e Powell refused to give a specific timeline for rate cutsဣ and continued to insist upon a d🉐ata-driven approach.

"We have stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2%. So far this year, the data have not given us that greater confidence," he said. "In considering any adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks."

For their part, o🔴ther Federal Reserve officials have stuck to the same li🍰ne in public appearances.

Cleveland Federal Reserve Bank President Loretta Mester and her counterpart in Chicago, Austan Goolsebee, were the first two Fed officials 𝓰to speak on monetary policy after the June meeting. Both reiterated the need for more confidence and said they would be looking for data t🌳o provide it.

“If I continue to see some of these better inflation reports than we got earlier in the year, then I feel comfortable starting the process of normalizing rates,” Mester said in an interview with Bloomberg TV Friday.

There's Still Time for Officials To Gain Confidence

Economists think the꧟re is plenty of time and data that could help the Federal Reserve committee members regain that confidence before September.

"The confidence lost in Q1 is now being rebuilt; rate cuts are still coming," wrote BMO's Deputy Chief Economist Michael Gregory.

Between now and the September meeting, there are three consumer and producer price index releases each. The Fed's preferred measure of inflation, the personal consumption expendit🧔♋ures (PCE) price index, also will have three more iterations.

Three reports on the state of the 澳洲幸运5官方开奖结果体彩网:labor market and new information on gross domestic product (GDP) in the second quarter will give further insi🀅ght into how the economy is digesting the still-restr🔜ictive policy. The Fed will check in on progress at their July 30 meeting before having to make a decision for September.

"There is no pre-set policy path," wrote Wells Fargo economists this week. "The strong economy continues to give the Fed cover to take its time in seeing sustained inflation progress before easing policy."