As September approaches, indications strengthen the possibility of a double reduction in borrowing costs, ie both from US Central Bank (Fed) as well as from European Central Bank (ECB).

At least that’s according to the minutes of the US Federal Reserve’s latest meeting published on Wednesday.

However, all eyes are on the speech of the president of the American bank, Jerome Powelltoday Friday at the annual economic conference in Jackson Hole, awaiting some indication of the Fed’s policy in the coming months.

Some observers expect Powell to refrain from making specific predictions for September, but to reiterate the importance of watching employment as the labor market shows signs of weakening.

However, Fed officials last month were overwhelmingly leaning in favor of cutting interest rates at the September meeting, with several willing to cut borrowing costs even then, according to minutes of the July 30-31 meeting. .

However, according to analysts, the chances of hearing some impressive news from the mouth of the powerful banker seem minimal.

After all, the market has already priced in that the Fed will begin cutting interest rates in September, and will likely continue to cut them through the end of the year and into 2025.

Risk balance

The Fed’s worries about the labor market may be exacerbated by the Labor Department’s final estimate on Wednesday that there were 818,000 fewer jobs in March than previously reported.

The Fed’s minutes also state that “a majority of Federal Reserve officials believe that risks to the labor market have increased, while risks to inflation have decreased.”

In fact, in July, after the FOMC meeting, Jerome Powell hinted at the standard press conference about the central bank’s intentions, noting that “if we get the data that we expect, then a rate cut could be on the table at the meeting of September”.

Notably, the jobless rate is already higher than the 4% that Fed officials had set for this year in their updated economic forecast in June, but also higher than the 4.2% that policymakers had forecast for the end of next year.

However, even as markets are already bracing for a rate cut in September, some Fed officials remain wary of easing monetary policy due to recent false positives on the inflation front.

For example, Fed Chair Michelle Bowman said on Tuesday that in September “we will have to look at a number of possible scenarios that could unfold” on the monetary policy front, adding that there were “upside risks to inflation.”