Overview

• Powell indicated the first move could come on Sept. 17, stressing that any decision depends on upcoming employment and inflation readings, including the Sept. 5 jobs report.
• Futures assign roughly an 80% chance to a quarter-point cut next month, while swaps point to two reductions by December with a small probability of a third.
• Treasuries rallied after the speech and the yield curve steepened, with short-dated yields falling more than long maturities.
• Some strategists warn that cutting with inflation still elevated could limit declines in longer-term yields and risk loosening inflation expectations.
• Political pressure on the central bank intensified as President Donald Trump threatened to fire Governor Lisa Cook, raising fresh concerns about Fed independence.