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Like Ben Bernanke and Janet Yellen before him, Federal Reserve Chairman Jerome Powell may be worried that the central bank’s use of extreme policy during the financial crisis left him with a relatively small amount of fire power to head off the next economic decline.

As reported by CNBC, that may make the idea of a so-called insurance rate cut later this month, an attractive option for the Fed chair, who looks determined to cut interest rates even as the domestic economy appears to be showing some signs of strength. 

“It’s pretty incredible how strong the data has been. We added 224,000 jobs. We had an extraordinarily strong retail sales report; a 0.3% gain in core CPI month over month. Manufacturing surveys are rebounding. Jobless claims are hovering at cycle lows,” said Michelle Meyer, Bank of America head of U.S. economics. “The set of data heading into the next FOMC meeting is really quite robust.”

Yet, Meyer, like many Wall Street economists, expects Powell’s Fed on July 31 to pull the trigger on a quarter point rate cut, the first since 2008, and possibly the first of several. Traders increased their bets on Thursday that the Fed could cut even deeper later this month.

“This is a Fed that is data independent.They are not cutting interest rates because of incoming data. They are cutting interest rates because they worry about the future data and they are being pre-emptive,” she said. She said the strategy of using some of the few rate hikes the Fed has available to boost the economy, and keep it from rolling over is a gamble.

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