Comments from Powell and St. Louis Federal Reserve President James Bullard cooled investor optimism about a rate cut next month.
"The Fed is insulated from short-term political pressures--what is often referred to as our 'independence,'" Powell said. "The question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation."
Powell's remarks were preceded by comments from Bullard, the most dovish of the FOMC's voting members, who told Bloomberg Television that a rate cut in July of 50 basis points likely would be "overdone" given the underlying strength of the U.S. economy.
Action Alerts PLUS senior portfolio analyst Jeff Marks weighed in that the investor expectations of a 50 basis point cut, which is what Bullard denied, was "excessive."
However, he wouldn't be surprised to see a 25 basis point cut, if the Fed decided to cut rates next month.