FOMC Tries to Parse Data From 'Inconclusive Economy,' Says Edwards

Kathryn Edwards, economic policy consultant and Bloomberg Opinion contributor, said the economic data doesn't give a clear reading on future rate cuts by the Fed, which also is confronting long-term issues that will affect policy.

The Federal Reserve is widely expected to halt its interest-rate-cutting cycle this week, as a steadier jobs market restores a degree of consensus at the central bank after months of growing division.

Several officials, including some close to the chair, have been signaling that rates are now in the right place — at 3.5%-3.75% following three consecutive cuts — to shore up employment and still keep downward pressure on inflation.

“They are now essentially within the strike zone of neutral estimates,” said Josh Hirt, senior US economist at The Vanguard Group Inc., referring to the level where rates will neither restrain nor stimulate the economy. “That brings about more caution, less urgency” for more cuts, he said.

The meeting offers Chair Jerome Powell a chance to direct attention away from the political and legal dramas engulfing the Fed, and back to the central bank’s core job of controlling inflation and maximizing employment. Any respite may prove short-lived. The expected decision to hold rates is likely to amplify the outrage of President Donald Trump, who wants them slashed.

His remarks will be scrutinized for hints about how long the Fed might stay on hold, what could tilt the balance back toward cuts — and whether the chair has any new moves up his sleeve in the fight with Trump.

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