As the Federal Reserve's FOMC monetary policy decision approaches, Fed officials will soon enter a "quiet period." According to Fed rules, these officials cannot make any comments on monetary policy from this Saturday (July 20) until the end of the FOMC meeting on Friday, July 31.

Therefore, this week's comments from Fed Chairman Powell and other voting members are closely watched by the market, as they will assess the slowdown in inflation and consider whether to signal the beginning of interest rate cuts.

Market analysts pointed out that Powell hinted at an interest rate cut in his latest speech yesterday. He continued to show a "dovish" stance, praising the recent three inflation data as "pretty good" and stating that there is no need to wait for inflation to fall to 2% before cutting interest rates.

Powell emphasized that "the first quarter economic data did not increase our confidence in inflation returning to the 2% target, but the three data points in the second quarter, including last week's data, did increase our confidence to some extent."

As the inflation rate gradually approaches the target of 2%, market concerns about how long the strong momentum of the US job market can continue. Against this background, Fed officials may use these last few days to hint at the urgency of interest rate cuts, or explain why recent data still does not support a shift to looser monetary policy.

This week's speaking Fed officials include Governor Adriana Kugler, who will speak on Tuesday afternoon local time; Governor Chris Waller, who is scheduled to attend an event on Wednesday morning; New York Fed President John Williams, who will appear overseas on Friday; and Richmond Fed President Thomas Barkin, who will speak on Wednesday morning.

Waller, as an important voice in the inflation debate, his views are especially worth paying attention to. Waller is naturally considered a "hawkish" voice, and he said at the end of May that he hoped to see "a few months of good inflation data" before supporting interest rate cuts. However, since his last monetary policy speech, the personal consumption expenditure price index (PCE) has dropped from 2.7% in May to 2.6%, and is expected to fall further.

Citigroup analysts predicted in a report last Friday, "We expect a strong signal in July that the Fed will begin cutting interest rates at the upcoming meeting" and if the economic situation develops as expected, action may be taken in September.

Editor/ping