Institution: The Federal Reserve meeting minutes will show that participants are increasingly concerned about the labor market conditions

The upcoming FOMC meeting minutes will reveal why the committee lowered its expectations for a rate cut in 2024, despite maintaining steady economic growth and unemployment forecasts. The unexpected rise in inflation in the first quarter of this year indeed shook policymakers' confidence in the inflation path, but regardless, after CPI and PCE showed significant slowdowns in May, the Fed's June inflation forecast may already be outdated. The baseline scenario is that the meeting minutes may show that participants' judgment on risk balance is even. The speed at which labor market conditions deteriorate is becoming increasingly important to the timing of the first rate cut. Although FOMC members maintain their unemployment forecasts unchanged, the meeting minutes will show they are increasingly worried about a possible rapid cooling off of labor markets, opening up opportunities for two rate cuts this year.