According to Odaily, the Federal Reserve's upcoming policy meeting next week may see the removal of the term 'elevated' when describing inflation. If this change occurs, it would be the strongest indication yet that the Fed plans to cut interest rates as early as September, initiating a new easing cycle. Adjusting the description of inflation to a milder term could also lead to modifications in another key sentence of the current policy statement: the Fed will not cut rates until officials are 'more confident that inflation is moving sustainably toward 2%.'In June, 2024 FOMC voting member Raphael Bostic indirectly suggested that an inflation rate of 2.5% or below could serve as a benchmark for considering a change in the inflation description. Many economists believe that the June PCE data, set to be released on July 26, will fall to or below this threshold.
