Former Dallas Fed Pres. Robert Kaplan: There are a number of disinflationary forces going on

Monetary Policy & Interest Rates - The Federal Reserve is widely expected to hold rates steady at the current FOMC meeting [1] - Some governors may dissent, arguing for lower rates [2] - The Fed is likely to keep options open, including a potential action in September [3][4][10] - The market believes that the Fed cutting rates is not a certainty, as evidenced by long rates increasing the last time rates were cut [11] - The Fed's control over the long end of the curve is limited, influenced more by future growth prospects and treasury supply/demand [12][14] Inflation & Economic Factors - There are disinflationary forces at play, including sluggish growth, regulatory review, and the AI boom [3] - Tariffs will increase costs, but the impact on persistent price pressures in a disinflationary environment is uncertain [4][5] - The Fed is trying to determine if cost increases are one-time events [6] - The unemployment rate is low due to decelerating workforce growth, not aggressive hiring [9] Labor Market - Hiring levels are sluggish and may continue to be so [10] Fed's Mandate - Price stability is considered a primary job for the Federal Reserve by many [8] - The Fed has been overbalanced towards inflation concerns recently due to the tariff situation [10] - The Fed is expected to try to get more balanced between inflation and full employment, which may lead to action [10] Fed's Decision-Making - The decision to cut rates requires a consensus among the 12 voting members, not solely the Fed chair's decision [14]