WSJ Fedwatcher Nick Timiraos is out with his preview of tomorrow's FOMC decision and he highlights that while there will be differences in the dot plot, the main message from everyone at the Fed is that they want to wait and see on the data and will do what's necessary after seeing it.
He notes that tomorrow's CPI report could change some FOMC dots and they're not due until just before the release.
"There are more signs emerging that the serious labor-market shortages and imbalances of the past three years have resolved without any meaningful increase in unemployment, raising questions over whether the labor market might soften at the margins," Timiraos writes.
Officials want more evidence that inflation is falling before cutting but don't want to wait until there are problems in the jobs market.
The main event will be the dot plot though and it will be directly impacted by tomorrow's CPI report.
"A disappointing inflation report could hold more officials to a projection of no more than one cut this year. A serene report could lead more of them to pencil in two cuts," he writes.
Absent a dramatic deterioration in the economy, Timiraos says that September is the soonest the Fed could cut but that it's tough for the Fed to send a signal about that month now because they still have three months of data to digest before the meeting.
