A bevy of tamer-than-expected inflation numbers over the past week has supercharg♎ed expectations that a Federal Reserve rate cut is ahead, but Fed officials the𒀰mselves are proceeding with caution.

Consumer and 澳洲幸运5开奖号码历史查询:wholesale inflation both came in lower than economists expected and the labor market is 澳洲幸运5开奖号码历史查询:showing signs of rebalancing. However, the Fed held its influential fed funds rat🎃es at a 23-year high for the seventh consecutive meeting earlier this week and downshifted its median expectations for rate cuts. These now narrowly predict just 澳洲幸运5开奖号码历史查询:one rate cut this year, as opposed to the three expected in their last projecꦇtions.

Forecasters think the earliest the Fed might cut interest rates is in September, and that's only if data continues to show a softening economy.

Rate Cut Expectations For September Soar

Traders have upped their expectations of a rate cut, according to the CME Group’s FedWatch tool, which forecasts rate movements based on 澳洲幸运5开奖号码历史查询:fed funds futures trading data. Last we꧒ek, traders were pricing in a nearly 50-50 chance that the Fed would cut intere🥃st rates in its September meeting. Now, that number sits at about 70%.

Investors als💖o have high hopes for impending rate cuts. The S&am🐓p;P 500 hit new highs in the wake of the inflation report and Fed meeting.

However, a September rate cut isn't set in stone. Economists say this week's data has 澳洲幸运5开奖号码历史查询:kept hꩲopes of a Se♋ptember rate cut alive, but economic data will be vital to the timing.

Fed Officials Are Proceeding With Caution

In his press conference following the policy meeting this week, 澳洲幸运5开奖号码历史查询:Federal Reserve Chair Jerome Powell refused to give a specific🧜 timeline for rate cuts and continued to insist upon a data-♕driven approach.

"We have stated that we do not expect it will be appropriate to reduce the target range for the federal funds rate until we have gained greater confidence that inflation is moving sustainably toward 2%. So far this year, the data have not given us that greater confidence," he said. "In considering any adjustments to the target range for the federal funds rate, the committee will carefully assess incoming data, the evolving outlook, and the balance of risks."

For their part, other Federal Reserve officials have stuck to the same ✃line in public appearances.

Cleveland Federal Reserve Bank Preꦺsident Loretta Mester and her counterpart in Chicago, Austan Goolsebee, were the first two Fed officials to speak on monetary policy after the June meeting. Both reiterated the need for more confidence and said they would be looking f🅘or data to provide it.

“If I continue to see some of these better inflation reports than we got earlier in the year, then I feel comfortable starting the process of normalizing rates,” Mester said in an interview with Bloomberg TV Friday.

There's Still Time for Officials To Gain Confidence

Economists think there is plenty of time and data that could help the Federal Reꦅserve committee members regain that confidence before September.

"The confidence lost in Q1 is now being rebuilt; rate cuts are still coming," wrote BMO's Deputy Chief Economist Michael Gregory.

Between now and the September meeting, there are three consumer and producer price index releases each. The Fed's preferred measure of inflation, the personal consumption expenditure🔯s (PCE) price 👍index, also will have three more iterations.

Three reports on the state of the 澳洲幸运5开奖号码历史查询:labor market and new information on gross domestic product (GDP) in the second quarter will give further insight into how the economy is digesting the still-restrictive policy. The F♔ed w🥃ill check in on progress at their July 30 meeting before having to make a decision for September.

"There is no pre-set policy path," wrote Wells Fargo economists this week. "The strong economy continues to give the Fed cover to take its time in seeing sustained inflation progress before easing policy."