Will the Fed Signal a September Rate Cut? Markets Brace for July FOMC Clues

The Federal Reserve is widely expected to hold rates steady at its July 29–30 FOMC meeting, but all eyes are now on whether Fed Chair Jerome Powell hints at a September cut, especially after softer inflation readings.

Market Sentiment: Dovish Shift in Play? According to Yardeni Research, the probability of a July cut has plunged to just 4.7%, based on the CME FedWatch Tool. The sharp drop follows June’s robust jobs report, which showed:

147,000 new payrolls

Unemployment rate dipping to 4.1%

But inflation tells a different story. Recent data, including July’s expected inflation drop, adds weight to the argument for easing in September.

Why It Matters to Investors Equity markets are riding strong earnings momentum, and a dovish Fed tone could further bolster sentiment. Yardeni notes:

S&P 500 blended EPS growth is tracking at 4.3% YoY, and could reach 8.0% when Q2 earnings wrap up

Forward EPS for the index hit a record $284.36, with a target of $300 by year-end

To monitor real-time earnings beats and economic indicators impacting Fed decisions, investors can track:

📊 Earnings Calendar – FinancialModelingPrepStay ahead of earnings surprises that shift market sentiment.

📉 Economics Calendar – FinancialModelingPrepWatch key macro data, including inflation and employment, that shape Fed policy.

Bottom Line The Fed’s July meeting may not bring immediate action, but the language matters more than the rate decision. If Powell leans dovish, expect volatility in bonds, a rally in equities, and a renewed focus on macro prints through August.