Fed Day, Budget Deadline Nears

The last time the Fed’s Federal Open Markets Committee (FOMC) met was July 29/30.  Like most of Washington, Fed officials often set aside time in August for vacations, so there was no August rate-setting meeting.  The Fed now has two months of information to look at, and on Wednesday at 2:00 p.m. the central bank will announce its rate decision.  It is widely expected that the FOMC will move to cut rates, and the general view is that the cut will be 25 bps. There have been mixed messages: we have seen weak job numbers, but last week we also saw a higher-than-expected inflation number. However, all indications point to a cut.

Much of the attention is likely to focus on the newest voting member, Stephen Miran, the current Chair of the President’s Council of Economic Advisors.  The Senate plans to confirm Miran tonight in order to allow him to be sworn in on Tuesday and become a voting Member of the Committee on Tuesday and Wednesday. It is anticipated that he would likely be a strong advocate for a cut that the President is seeking.  In fact, during the confirmation hearing Miran told the Senate Banking Committee that he would be taking an unpaid leave from his White House job to serve as a Federal Reserve Governor, returning to the White House at the end of his term early next year.

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