Fed’s September Meeting Faces Unusual Pressure Due to Calendar Quirk

The Federal Reserve's September meeting just got hotter—thanks to a scheduling oddity that cranks up the stakes. No room for error as markets brace for impact.

Why it matters: When the Fed's printer hiccups, crypto traders reach for their ledger wallets. This time, the calendar’s doing the heavy lifting.

The setup: A technicality in the Fed’s timeline forces sharper decisions—no dovish escape hatch. Bitcoin maximalists smirk while traditional finance scrambles to adjust spreadsheets.

Bottom line: Another reminder that decentralized networks don’t care about bureaucratic calendar quirks. The irony? Wall Street still needs a human to flip the 'open sign' on the door.

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Fed policymakers don't make rate decisions ahead of time, so Powell's response is typical. But a quirk in the Fed's calendar raises the stakes for the September meeting. As Morgan Stanley's chief US economist Michael Gapen has observed, the gap between the Fed's July and September huddles is the longest in the Fed's annual schedule.

A lot can happen between now and then.

"A reasonable base case is that the effects on inflation could be short-lived, reflecting a one-time shift in the price level, but it is also possible that the inflationary effects could instead be more persistent, and that is a risk to be assessed and managed," Powell said during the press conference Wednesday.

We do have some level of certainty, however. Powell indicated that, to some extent, the Fed has already chosen to look through the inflationary effect of tariffs as a one-time event. The Fed, he reminded everyone in a not-so-comforting way, could have raised rates to counteract the pricing pressures of the new levies. But he and most of his colleagues think it best to wait for now.

However, a long enough wait can result in a different outlook. As Powell himself acknowledged, “We’re going to be looking at a lot of data in the next cycle. It is one of the cycles where we have two employment and two inflation reports, and we’ll see where that takes us.” As the timeline stretches out, uncertainty can expand.

Of the data ahead, Powell noted that he's especially keeping his eye on the unemployment rate, as both supply and demand for jobs has declined — deprioritizing the headline monthly job gains. But if the unemployment rate starts to rise, that's a good indicator the central bank has kept up its slightly restrictive posture for too long. But he also suggested the fight to curb inflation "is most of the way back." We already have two dissenters on the rate-setting committee who believe the Fed should already be cutting.

So maybe September will be a no-brainer, and looking back to the July meeting will seem like an overreaction to Powell keeping his options open. The Fed is going to get more data than normal before its next move. Those figures could, however, be in conflict with each other, or suggest keeping a restrictive policy, extending the painful decision making until later in the year. More data will bring more insight.

But that can also mean more waiting.

Hamza Shaban is a reporter for Yahoo Finance covering markets and the economy. Follow Hamza on X @hshaban.