Jay Powell argued this week that the Fed is not “behind” as it starts a cycle of interest rate cuts.
His main challenge in the coming months is to keep that narrative intact if the job market keeps cooling and the economy deteriorates.
“We don’t think we’re behind,” the Federal Reserve chairman said during a Wednesday press conference following a decision to cut rates for the first time since 2020. “We think this is timely, but I think you can take this as a sign of our commitment not to get behind.”
Some on Wall Street still have their doubts, arguing the jumbo 50 basis point move announced this week is an attempt to play catch up and that the path ahead for rate cuts may be too shallow.
Federal Reserve Board Chairman Jerome Powell speaks during a news conference at the Federal Reserve in Washington on Wednesday. (AP Photo/Ben Curtis) (ASSOCIATED PRESS)
The central bank is being “reactionary” instead of proactive, said EY Chief Economist Gregory Daco, who pointed to the fact that Powell acknowledged the Fed might have cut rates in July if its policymakers had seen July’s employment figures first.
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Those figures, released just two days after the Fed’s July 31 meeting, showed that the unemployment rate had risen to 4.3%, stoking concerns the Fed had waited too long.
The rate dropped to 4.2% in August, but another rise in the coming months could bring those same fears back.
“It’s essential for Fed policymakers to adopt a robust forward-looking framework and abandon data dependency,” Daco said. “Unfortunately, that’s not the case so far.”
There remain “real risks” that a soft landing for the US economy may not be achieved especially if the labor market deteriorates, Nationwide chief economist Kathy Bostjancic told Yahoo Finance Thursday.
“Chair Powell is trying to get ahead of that…but there is always the risk they have been a little too slow in doing this.”
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Fed officials this week predicted the unemployment rate would tick up to 4.4% this year and hold at that level through next year.
Another hurdle for Powell is that Wall Street expects more future cuts than predicted by central bank policymakers, who this week estimated two more smaller cuts of 25 basis points through the rest of 2024 followed by four smaller cuts in 2025.
One Wall Street firm that came out with a more aggressive forecast was BofA Global Research, which raised its call for rate cuts during the remainder of this year to 75 basis points.
JPMorgan Chase chief economist Michael Feroli also said he is still expecting a faster pace of rate cuts than the Fed consensus.
Feroli expects a 50 basis point cut at the next meeting in early November contingent on further softening in the two jobs reports between now and then.
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Luke Tilley, chief economist for Wilmington Trust, said the Fed’s predicted path is too slow for an economy where the job market has normalized and inflation is likely to reach the Fed’s 2% target in the first quarter of 2025.
Tilley thus expects 200 basis points of cuts next year — double the Fed’s projection — and for rates to come down to neutral – the level that neither boosts nor slows growth — by next fall.
“It’s the longer-term path that matters more, and here the Fed is still a bit behind in that the median expectation is for just 100 bps of cuts next year,” he said.
Signs of division
But the Fed expects the economy to continue to show strength, aligning with their shallower rate cut predictions. Officials see the economy expanding at 2% this year, roughly inline with the 2.1% previously forecast, and coasting at that level the next few years.
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And the goal is to preserve that economic growth without re-stoking inflation. Officials predict inflation will end the year at 2.6%, down from 2.8% previously, before falling to 2.2% next year.
No matter what happens, Powell will also have to manage signs of internal division over the path ahead.
The Fed’s rate-setting committee is almost evenly split on the number of additional rate cuts expected this year, with seven policymakers favoring one additional 25 basis point rate cut before year end and nine members favoring 50 basis points of additional easing.
Two policymakers expect no more rate cuts.
That path implies several officials could have supported a 25 basis point cut this week but decided to err on the side of caution and not regret further deterioration in the job market.
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Fed governor Michelle Bowman even voted against the 50 basis point cut, arguing instead for a smaller quarter point cut. Her dissent was the first for the Fed since 2005.
“The Fed chair is now seen to have significant influence over the FOMC as he managed to convince most officials that front-loading cuts was optimal,” said EY’s economist Daco.
“The bargain is probably that policymakers may be more resistant to rapid easing at the next two policy meetings.”
Bostjancic, the chief economist at Nationwide, said she believes the Fed should cut another 50 basis points at its next meeting in November, even though that is not her firm’s forecast.
But to cut by another 50 “you would really have to have consensus” among Fed officials. “It’s a hurdle and you would have to have broad agreement.”
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While most AI in financial services remains advisory, LUMIQ has built the layer that owns the decision — autonomous, auditable AI agents making regulated calls in production at leading banks, insurers, and capital markets firms. Today, LUMIQ serves clients across India, the United States, and Southeast Asia — leading institutions across insurance, banking, and capital markets.
NEW YORK and SINGAPORE, June 19, 2026 /PRNewswire/ — LUMIQ, an AI-native financial services company, today announced a strategic funding round to scale auto-decisioning for financial institutions across the United States and Southeast Asia. The round was led by Bajaj Finserv, one of India’s largest and most diversified financial services groups, with participation from existing investor Info Edge Ventures.
LUMIQ raises Strategic Funding to become AI decision layer for financial services
Right now, thousands of customers are waiting for a policy to be issued, a loan to be disbursed, a claim to be adjudicated, because somewhere an FSI employee is drowning in decisions, held back by the risk of getting it wrong. Today, when e-commerce delivers the same day, banks and insurers still decide in weeks. We built LiteCone to take that burden: AI decides the routine cases, completely and accountably, so humans spend their judgment on the one case that actually needs it. This round lets us bring that to every financial institution in the markets that matter most. Shoaib Mohammad, Co-founder and CEO, LUMIQ
From AI that assists to AI that decides
For decades, financial institutions have bought technology that made their people faster — faster data, faster scoring, faster copilots. The decision still landed on a human. LUMIQ is changing that. Through its LiteCone platform, the company deploys AI agents that read the file, apply the institution’s own guidelines, and reach the decision end to end — escalating only the cases that genuinely require human judgment. The output is not a recommendation. It is a decision, with full reasoning attached, cross-referenced to policy, and defensible under audit.
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The results in production speak clearly. At a leading life insurer, LUMIQ’s LEO agent decides 75–80% of underwriting cases with zero human touch, reduced policy issuance cost by roughly 25%, and compressed turnaround from days to under eight minutes — running 24×7 with complete auditability. Across its client base spanning insurance, banking, and capital markets in India, the US, and Southeast Asia, LUMIQ now processes millions of decisions annually.
LiteCone turns a real financial-services role into a working AI agent in weeks. Every agent we deploy is consistent, explainable, compliant, and auditable by design — not as an afterthought. This capital lets us go deeper on the platform and broader across roles. And through our cloud and AI lab partnerships, institutions will increasingly find LiteCone already embedded in the platforms they run today. Vaibhav Dobriyal, Co-founder and Chief Product Officer, LUMIQ
This round funds four priorities: expanding go-to-market in the US and Southeast Asia; deepening LiteCone’s decisioning capabilities; extending the agent workforce across more financial-services roles; and building a partnership ecosystem with cloud hyperscalers, AI labs, and core banking and insurance platforms so LiteCone is embedded where institutions already run.
LUMIQ’s investors backed the round for the same reason its customers adopt LiteCone: agents already deciding in production, with auditability and control built in.
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As a financial-services group, we know how much rests on getting regulated decisions right, at speed and at scale. LUMIQ has built AI agents that decide in production with auditability and control built in, the capability the industry has been moving toward. We are proud to lead this round and to support the team’s expansion across the US and Southeast Asia. Lakshmi Iyer, Group President – Investments & CEO, Bajaj Alternates
Our conviction is grounded in what LUMIQ has already built. Their AI agents aren’t just built for the future. They are operating in production today, at speed. This combination is rare, and its value will only compound as the company scales globally. Girish Jhunjhunwala, Fund Manager – PE and VC Investments, Bajaj Alternates
Financial services is one of the hardest categories to crack — regulated, risk-averse, and unforgiving of hype. LUMIQ has put agentic AI into live financial-services workflows and earned the trust of large institutions across the US, Southeast Asia and India. That is how a category-defining company in financial-services AI gets built, and we are proud to keep backing the team as they scale globally. Kitty Agarwal, Partner, Info Edge Ventures
LUMIQ’s goal is to lead one category: auto-decisioning at production scale for financial services. Agents that act, not assist, and never compromise audit, compliance, or predictability.
About LUMIQ LUMIQ is an AI-native financial services company. Through its LiteCone platform and a growing workforce of production AI agents, LUMIQ turns real financial-services roles — insurance underwriter, credit underwriter, claims adjudicator — into agents that are consistent, explainable, compliant, and auditable. The company pairs deep domain expertise across banking, insurance, and capital markets with frontier AI. LUMIQ employs over 350 AI and data specialists, and has offices in New Jersey, Singapore, and Delhi NCR (India).
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Web: www.lumiq.ai
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View original content:https://www.prnewswire.com/apac/news-releases/lumiq-raises-strategic-funding-to-become-the-ai-decision-layer-for-financial-services-302805280.html
Consumer confidence has plunged among traditionally optimistic younger adults amid fears for their personal finances and the wider economy, figures show.
GfK’s long-running Consumer Confidence Index remained unchanged at an overall score of minus 23 in June.
However, the analyst said this was was “misleading as, beneath the surface, there are new signs that confidence is weakening”.
Source: GfK
Neil Bellamy, consumer insights director at GfK, said: “The biggest fall this month is among those aged 16 to 29, traditionally one of the most optimistic groups.
“Here confidence has dropped 11 points over the past month to minus two, the lowest level seen for two years, driven by large falls in views on both their own personal finances and the wider economy.
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“More broadly, there are now no demographic groups with a positive confidence score, including higher-income households earning £50,000 or more, who have slipped back into negative territory as of June.
“Confidence remains subdued and vulnerable to further economic or political uncertainty.”
Sourve: GfK
Overall, confidence in personal finances over the coming year remained flat at minus two, four points lower than this time last year.
The measures of both personal finances and the economy over the previous 12 months were both slightly down, by two points and three points respectively, “reflecting the sense that things have been extremely tough over the last year for so many”, GfK said.
The only measure to increase was expectations for the wider economy over the next 12 months, up two points to minus 36 but still eight points below this time last year.
The major purchase index, an indicator of confidence in buying big ticket items, remained at minus 20, four points lower than June last year.
“Ships of the World, start your engines. Let the oil flow!” said Donald Trump on social media after he announced the signing of an interim peace deal with Iran on Sunday. Under the agreement – which Iran acknowledged included a 60-day negotiating period for a final deal – the president said that following retrieval of mines, there would be a “toll free opening” of the Strait of Hormuz.
But many of the finer details remain “unclear”, said The Guardian. There are questions over the “exact timing of the reopening of the maritime route, who will oversee safe passage and whether any conditions will be applied”.
Financial markets have welcomed the announcement, but further volatility could yet hit people’s pockets.
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Have oil prices changed?
The price of oil fell to about $83 (£62) per barrel following Sunday’s announcement, its “lowest since the early days of the war”. Then on Tuesday it dipped below $80. In February, before the first missiles struck Iran, each barrel cost around $73. The price peaked at around $120 at the height of the conflict.
Prices are expected to fall in the wake of a prolonged ceasefire, and there are “real grounds for optimism”, said Politico. Damage to oil-specific infrastructure has been “limited”, meaning it could take “as little as six weeks to resume outflows”.
“So that’s the energy crisis sorted, right?” Not so fast.” A combination of damage to wider infrastructure and the continued closure of the Strait of Hormuz has meant roughly 12 million fewer barrels of oil have been produced each day. And they “won’t magically reappear on the market even if the pact holds”.
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Will this continue?
The “first big test” of the deal will be whether shipping companies will have enough “confidence” to return the use of the strait to pre-war levels, said The New York Times. If successful, this will free the 250 tankers and 330 cargo ships trapped in the Gulf, according to the BBC, and transport oil around the world. Oil and gas producers in the Gulf nations would then need to re-establish “wells, refineries and other infrastructure”.
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Even if all of that were to materialise, European and Asian countries who have historically depended on oil from the region “will face a long wait”. Processing oil takes considerable time. “It is unlikely that the prices of gasoline, diesel and other fuels will return to pre-war levels anytime soon.”
What about inflation?
Despite air fares “surging” and fuel costs “tipping higher”, UK inflation remained at 2.8% in May, said The Independent. This was a “surprise” to economists, who had widely predicted a rise to 3% and “perhaps even beyond” due in part to the war in Iran.
Remaining at this level could imply that the “cost-of-living squeeze will not play out as badly as had been anticipated” earlier this year, even if the “Iran war sent energy costs spiralling”. However, prices are set to rise again later in 2026, leaving savers to make sure their investments are earning an interest rate “well above the rate of inflation”.
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What does this mean for consumers?
Food prices in the UK look to be rising more slowly. Should the Strait of Hormuz open freely, fertiliser, which has “soared in costs” and put pressure on farmers, could fall substantially, said the BBC. Jet fuel has already seen a “small fall in price”, with Northwest Europe jet fuel trading at $1,033 (£780) per tonne, compared with $831 pre-conflict and around $1,840 at its peak.
How will businesses be affected?
Beneath the “encouraging headlines” about inflation control, there is a “hidden crisis for businesses”, said The Telegraph. The Iran war triggered one of the largest energy shocks in history, meaning businesses were “swallowing soaring costs to spare shoppers”.
“Input rises” for producers climbed by “8.7% year on year in May”, larger than the 7.9% in April and the highest in more than three years. On the bright side, this means the economy may avoid a dreaded “wage-price spiral”, but conversely lower margins could lead to increased pressure on the employment market.
