FedChair Jerome Powell is sitting down to have a conversation with David Rubenstein at the Economic Club of Washington.

Just last week, in two days of congressional testimony, Powell specifically declined to speculate on the timing of the Fed’s first rate cut:

“I’m not going to be sending any signals about the timing of future actions.”

Today’s appearance by Powell is his first public opportunity to respond to the better-than-expected June inflation data. He described the May data as “very good” and traders will be intently dissecting what Powell might say after his congressional testimony last week reinforced growing consensus that the Fed may cut as early as September.

We think Powell will  – as usual – take the opportunity to emphasize the importance of keeping the Fed politically independent, but would also acknowledge the unsustainable trajectory of the national debt.

Ian Lyngen at BMO Capital Markets says, “Powell will retain flexibility on the precise timing of any looming cut and reiterate the messaging from last week’s congressional testimony.” 

At the very least, BMO expects Powell’s tone will keep the 2yr yield below 4.5% and in turn “there is little preventing 2s/10s from pushing to the -15bp/-20bp range and 5s/30s to this year’s peak of 38.2 bp.”

Just a couple hours before Powell’s remarks, Goldman Sachs economists led by Jan Hatzius wrote in a note to clients that there was a “solid rationale” for cutting rates as soon as July 31.

Watch Powell speak live (due to start at 1230ET):