recession

Let's make predictions about the next FOMC. In conclusion, I think the same policy as before will continue. In other words, if inflation subsides or concerns about a recession increase, interest rate cuts are considered.

I don't think there is any clear mention of interest rate cuts in September. There may be statements that it will be made as needed, but it probably does not guarantee the interest rate cuts expected by the market. There is a possibility that this will be perceived negatively by the market, which is expecting interest rate cuts into account.

As for future prospects, since the Fed is too cautious about interest rate cuts, I think there is a high risk that interest rate cuts will take a backseat. This means a scenario where interest rates are cut in a hurry when indicators indicating a recession come out.

Also, it is questionable whether interest rate cuts will actually take place in September. If interest rate cuts are postponed, the ongoing sector rotation (inflow of funds from large stocks to small cap stocks) will be wasted, and there is a possibility that panic will occur throughout the market.