Federal Reserve Eyeing September for Interest Rate Cuts Amid Job Market Concerns

The Federal Reserve is considering interest rate cuts starting in September, guided by recent job market downturns. Key changes in policy statements signal a potential shift from two years of tight credit. Minutes from the July meeting will clarify policymakers' stance and future rate cut size, with futures markets favoring a modest reduction.

The Federal Reserve is signaling a potential interest rate cut in September, following concerns about job market softness. Officials are expected to elucidate their stance when the minutes of the July 30-31 meeting are released on Wednesday.

During the last policy meeting, the Federal Open Market Committee left the overnight borrowing rate steady but made critical changes to their policy statement. This paved the way for a rate cut, a move reinforced by Fed Chair Jerome Powell's comments at the post-meeting press conference.

Officials pointed to the Labor Department's report of slowed payroll growth and rising unemployment as reasons to consider easing rates. The upcoming minutes will provide insight into the extent of support for this shift. The futures market already anticipates a rate cut, with the September meeting likely to set a new direction for U.S. monetary policy.

(With inputs from agencies.)