WASHINGTON—Federal Reserve officials are beginning preparations for a June policy meeting with difficult choices to deliberate.
Investors’ growing conviction that the Federal Reserve will lower interest rates in coming months is putting policy makers under scrutiny when they attend what’s billed as a listening event Tuesday.
With financial markets discounting at least two quarter-point Fed interest-rate cuts by year-end — one more than the case just days ago — the Fed’s conference on policy strategy, tools and communication in Chicago will be closely watched. If Fed Chairman Jerome Powell, who gives opening remarks Tuesday, wanted to counter the quickly emerging consensus about easing, he has a platform to do so.
“We now see a base case in which the Fed will reluctantly cut rates three times starting in September,” Krishna Guha and Ernie Tedeschi at Evercore ISI wrote Monday. “Though we do not think the FOMC has yet reached this conclusion and there remains a substantial possibility it will get away with keeping rates on hold.”