Institution: Fed meeting minutes will show participants are increasingly concerned about labor market conditions

The upcoming FOMC meeting minutes will reveal why the committee lowered its expectations for a rate cut in 2024 while maintaining its economic growth and unemployment rate expectations. The unexpected rise in inflation in the first quarter of this year has indeed shaken policymakers' confidence in the inflation path, but regardless, the inflation forecast provided by the Fed in June may have become outdated after CPI and PCE showed a clear slowdown in May. The baseline scenario is that the meeting minutes may show that the participants' assessment of risk balance is balanced. The speed at which the labor market deteriorates is becoming increasingly important for the timing of the first rate cut. Although FOMC members maintain their expectations for the unemployment rate, the meeting minutes will show that they are increasingly concerned about the possibility of a rapid cooling of the labor market, which opens the door for two rate cuts this year.