Fed is in 'wait and see' mode on rate cuts, says former Fed Vice Chair Richard Clarida

Monetary Policy Outlook - The market anticipates the Federal Reserve (Fed) to potentially cut rates, influenced by factors such as President Trump's urging and internal committee discussions [1][2] - The Fed committee holds diverse views, with some members favoring no rate cuts this year, while others, including the chair, foresee potential cuts [2] - Some Fed governors suggest current short-term rates are "pretty restrictive," implying room for rate reduction [3] - The Fed is in "wait and see mode" to assess the impact of tariffs on the economy before making a decision on rate cuts [2][4] - A 25 basis points rate cut in July is considered by some as a minor adjustment that could appease those advocating for lower rates [5] Interest Rate Expectations - The market anticipates the initial rate cut may occur in the fall, potentially starting in September [7] - The committee's "dots" indicate that 12 members believe two rate cuts would be appropriate [7] - Standard monetary policy rules suggest that current policy is restrictive [3][8] Fed Communication - Providing useful information on its intentions is valuable for any central bank [9] - The usefulness of the "dots" projections is debated, with some questioning their value [8][9]