The Federal Open Market Committee (FOMC) is poised to cut the policy rate at its meeting on July 30–31, but members of the committee are divided. Markets are pricing a 25 basis point (bp) cut, and we believe that is the most likely outcome, but we also see a meaningful chance of a 50 bp cut. Following the June 18–19 meeting, a majority of the FOMC was still in favor of keeping rates on hold through the end of 2019 (according to the Fed’s economic projections and “dot plot”). However, the tone of Fed communications has taken a somewhat more dovish shift in the weeks since. Of note, Fed Chair Jerome Powell, in his ... (full story)