| The Federal Open Market Committee held the federal funds rate steady in a range of 5.25% to 5.5% on Wednesday. But, as Enda Curran writes, all Wall Street heard were the signals that a rate cut is coming in September. That should be a relief to a lot of borrowers. Plus: Amanda Mull has a column for everyone fed up with shopping in a locked-down retail world and an ex-OpenAI board member makes a name for herself in Washington. If this email was forwarded to you, click here to sign up. Please note: Our email domain is changing, which means you'll be receiving this newsletter from noreply@news.bloomberg.com. Update your contacts to ensure you continue receiving it—detailed directions below. After months of uncertainty, the prospect of lower borrowing costs for households and businesses is finally coming into view. Numbers released this week showed slowing wage growth and a softening jobs market, nudging the Federal Reserve closer to the point where it can cut interest rates from their highest levels in more than two decades. For some sectors, lower rates can't come soon enough. Take manufacturing, where activity shrank in July by the most in eight months, prompting the biggest employment cutback in four years. Other areas are hurting, too. The housing market is frozen as mortgage rates hover around 7%. Small business are complaining of costly loans, and lower-income households are getting stung by car and credit card payments It's not that the economy is falling off a cliff—far from it. Consumers are still spending, better-off households are reaping the benefits of higher home values, the stock market is booming and companies writ large are doing fine. The worry is that, away from the headline data, conditions on the ground are changing and potentially faster than policymakers realize.  Powell at his news conference on Wednesday in Washington. Photographer: Al Drago/Bloomberg Fed Chairman Jerome Powell this week acknowledged that the jobs market, for example, has softened and he pointedly added "I would not like to see material further cooling"—a clear nod to his concerns about what's ahead. Although the Fed held rates steady on Wednesday, officials gave a new signal that they are open to the idea of cutting when they meet next, in mid-September, provided that inflation continues to trend toward its 2% target. If the Fed does lower rates, the question will then become how much it can cut over the months ahead. Traders are already betting on three cuts this year. Powell said he could "imagine a scenario in which there would be everywhere from zero cuts to several cuts" over the remainder of 2024, "depending on the way the economy evolves." A big clue will come on Friday morning when employment data for July is released. Unemployment has risen in each of the past three months, reaching 4.1% in June, the highest level since 2021. (It hit a low of 3.4% in early 2023.) If the jobs data for July comes in on the strong side, then Fed will breathe easier about its rate plans. If the figures show employment weakness, then cue criticism that policymakers are cutting too late. There's a lot at stake. | 
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