A quiet FOMC meeting

This Wednesday will conclude the June FOMC meeting with the decision on interest rates. As you can see in the chart below, no change in interest rates is expected. In fact, Fed fund futures do not discount a rate cut until September. What’s relevant this week is the Fed statement on the economy and the answer in the press conference after the meeting. Likely, J Powell will be asked about the deficit and the potential impact of thr Ukraine and Israel conflicts on the country’s economic policy, but it’s also likely he will answer vaguely or simply refer to the Fed’s dual mandate, unemployment and price stability. Powell knows that he will not be renewed another term (May 16th, 2026), and that he’s likely to go through history as the chairman that broke the inflation’s spike of 2022 and brought it back to 2%. He will not risk that. The action is in the geopolitical front and the potential escalation of the two major conflicts as well as the trade negotiations with China and their position in both conflicts.

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