While the FOMC statement itself had zero forward guidance, Fed Chair Powell came out convincingly in favor of a Sept rate cut in the press conference. We believe its almost a certainty now that Fed might cut by 25 bps at each of the remaining 3 meetings in REMCY24. Our belief flows from the argument that US consumers are exceptionally weak in spending right now, US employment numbers are going to worsen significantly as we move in to H2CY24 & US Core PCE is in sustained downtrend with rental inflation falling & commodities globally in a downtrend. The continued focus of Fed Chair on the dual mandate i.e. full employment & core PCE around 2% implies the sensitivity of Fed towards employment, especially in an election year.
