Banking Policy Institute/Nelson: Fed May Shift Its Wording on Inflation Outlook

Forex - Analysts expect a quiet quarter-point rate cut in the U.S. this week, but Bill Nelson, Chief Economist at the Bank Policy Institute, stated that the Fed may provide some hints about its changing views on inflation. Nelson noted that in the Fed's previous policy statement, it was said, “The Committee has gained more confidence that inflation is progressing sustainably toward 2%,” but considering that the year-over-year weighted average core CPI and PCE inflation figures have not declined significantly since summer, it might be challenging for Fed officials to reiterate their confidence. Nelson suggested that Powell could use those remarks to justify a pause in rate cuts at the Fed's final meeting of the year in December.