Jerome Powell

While a rate cut is likely next week, dissent on the Federal Open Market Committee may hold the key for future moves.

Observers said the opponents of further rate cuts on the Fed tend to be the non-voters.

The Federal Open Market Committee meeting featuring the release of a new Summary of Economic Projections should give the market a better clue as to whether the expected rate cut is part of a mid-cycle adjustment or the second step in an easing cycle.

The Federal Reserve is likely to cut interest rates this week as its takes out some insurance to keep the U.S. economic expansion continuing in the face of geo-political uncertainty and a global slowdown.

President Donald Trump urged the Federal Reserve to lower interest rates to a level typically reserved for recessions or periods of persistently weak growth, suggesting that such a setting could allow the government to restructure Treasury debt at a lower cost.

Federal Reserve Chairman Jerome Powell said the most likely outlook for the U.S. and world economy is continued moderate growth, but the central bank was monitoring “significant risks.”

Federal Reserve Board Chairman Jerome Powell again pledged the central bank “will act as appropriate to sustain the expansion,” despite “no recent precedents to guide” policy decisions.

Two dissents on the vote to cut rates were the first of Chairman Jerome Powell's term.

“A couple” of Federal Open Market Committee members wanted a 50 basis point rate cut at its July 30-31 meeting, according to minutes released Wednesday, while “several” would have preferred no action.

By the end of the week the municipal bond market should have a better idea of what Federal Reserve officials are thinking.