Fed Holds Rates Steady at 5.25-5.50%, Signals Possible Cut in September
- Federal Reserve maintained the federal funds rate at 5.25-5.50% for the eighth consecutive meeting
- Chair Powell indicated September meeting is "on the table" for a potential rate cut if inflation data cooperates
- Core PCE inflation fell to 2.6% year-over-year, approaching the 2% target but not yet there
- Labour market showing signs of cooling — unemployment ticked up to 4.1%
- Treasury yields dropped 8bps on the announcement as markets priced in higher cut probability