By Nicholas Jasinski

Federal Reserve meeting minutes released on Wednesday will provide a look into how policymakers recently viewed the state of the U.S. economy and the appropriate path for interest rates this year. The insight comes as markets are betting that the central bank will deliver its first rate cut in more than four years in September.

The minutes from the Federal Open Market Committee’s July 30-31 meeting will come out at 2 p.m. Eastern time on Wednesday. The FOMC—the Fed’s policymaking committee—held the federal-funds rate target range unchanged at 5.25% to 5.50% at the meeting.

While noting a better balance of risks to achieving its employment and inflation goals, the committee’s postmeeting statement said that officials were waiting for more encouraging data before changing interest rates. “The committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%,” reads the FOMC’s July policy statement.

Fed Chair Jerome Powell seconded that sentiment in his July 31 press conference, while leaning a bit more dovish: “We’re getting closer to the point at which it will be appropriate to reduce our policy rate, but we’re not quite at that point yet,” Powell said.

Fed watchers will closely parse the minutes for tweaks to the generally sedate wording of the document. They will be on the lookout for language suggesting that the FOMC is getting close to supporting rate cuts. The FOMC’s next meeting will be held from Sept. 17-18.

Even more so than usual, Wednesday’s meeting minutes will be old news. Policymakers met before the release of July jobs data on Aug. 2, a weaker-than-expected report that raised recession fears and sent a shudder through markets. Officials’ characterization of the U.S. economy and labor market—and the proper monetary policy response—won’t include takeaways from that data. Ditto from the July inflation and retail sales reports that have come out since then.

Investors and economists will instead have to wait for the latest insights: Powell is scheduled to speak at the Fed’s Jackson Hole Monetary Policy Symposium at 8 a.m. local time, or 10 a.m. Eastern, on Friday morning. He may lay the groundwork for a rate cut next month, pending confirmation from the August jobs and inflation data to be released in early September.

Interest-rate futures markets on Tuesday were pricing in about 72% odds of a quarter-point reduction in the fed-funds rate in September, with the balance in favor of a half-point cut.

Write to Nicholas Jasinski at nicholas.jasinski@barrons.com