Fed’s Bowman Sparks July Rate Cut Frenzy – Markets Brace for Impact
Wall Street’s favorite guessing game just got hotter. Federal Reserve Governor Michelle Bowman just threw gasoline on the rate-cut speculation fire—and traders are loving every minute of it.
### The Fed Blinks First
Bowman’s unexpected dovish turn sent CME FedWatch odds skyrocketing. Suddenly, July’s looking like the month Powell & Co. finally cave to market pressure. Because nothing says 'data-dependent' like folding at the first sign of economic turbulence.
### Liquidity Tsunami Ahead?
Risk assets are already pricing in the sugar rush. Crypto’s licking its chops—nothing fuels a speculative frenzy like cheap money chasing fewer yield opportunities. Traders are placing bets like it’s 2021 all over again.
### The Punchline
Another chapter in the Fed’s 'higher for longer' fairytale gets rewritten. Meanwhile, the institutional herd prepares to front-run the very policy shift they’ve been begging for. Stay tuned for the inevitable 'we’re still vigilant' Fed-speak walkback next week.
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“Should inflation pressures remain contained, I WOULD support lowering the policy rate as soon as our next meeting in order to bring it closer to its neutral setting and to sustain a healthy labor market,” said Bowman in prepared remarks on Monday.
Inflation Falls as Two Fed Officials Support a July Rate Cut
Inflation is on its way down and has shown no signs of being driven higher by President Trump’s tariffs, at least not for now. May’s consumer price index (CPI) inflation report showed a 2.4% year-over-year rise, falling closer to the Fed’s goal of 2%.
Last week, Fed Governor Christopher Waller said that the central bank is “in the position” to cut rates in July. He warned that the Fed shouldn’t wait for a labor market crash before cutting rates.
The S&P 500 (SPX) is trading higher on Bowman’s comments as rate cuts can stimulate the economy by lowering the cost to borrow for both businesses and individuals.
