US Fed does not want to create an outright recession which will basically destroy all the hard work they have done to achieve in the past 36 months. They might move the monetary policy from the “restrictive territory” to moderately restrictive territory soon. Hence, they might indicate comfort with recent inflation numbers as well as the need to bring rates down before an accident happens. Although the market is currently pricing in 68 bps of cuts in CY24, we expect 25 bps cut each in Fed’s Sept & Dec meeting.
