"Fed's Microphone": Market Overinterprets Comments on Possible Fed Rate Cut in June

The Federal Reserve's sounding board," Nick Timiraos said, the comments made by the Federal Reserve's Harker on Thursday have attracted widespread attention, as some market participants have overinterpreted them as a signal that the Fed may be preparing to cut rates in June. Harker did not actually say that a rate cut in June is imminent. When Harker mentioned a rate cut in June, he used the word "if" twice: "If we have clear and convincing data before June, if we know what action is the right one at that time, then I believe the committee will take action." The danger of relying too heavily on these overly broad "if" assumptions is that they do not provide a particularly clear answer.