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The Fed comes front and center today and the big question heading into the meeting comes down to how strongly officials signal their desire to cut rates. The central bank is widely expected to hold its benchmark short-term interest rate steady—in a range between 5.25% and 5.5%, a two-decade high—while setting the table to begin a series of reductions at the next meeting in mid-September. Language that acknowledges recent improvement in inflation and a more equal balance of risks, together with any changes to the forward guidance, will set the stage for Powell’s press conference.

Many expect Powell will open the door wider to a September cut without explicitly committing to any course of action and we wouldn’t be surprised by this result. If news on inflation remains constructive between now and September, it could be enough to signal that a rate cut won’t have adverse effects. Markets are, of course, a forward looking mechanism, so what happens after September? Fed officials won’t present new projections this week but once they make their first move, they could cut rates by a quarter percentage point roughly once every quarter as new data allows.