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Analysts at CIBC, see the Federal Reserve basing its case for rate cuts not in the current state of the economy but on what could happen in the future.  

Key Quotes:  

“Hard data on the US economy suggests growth is slowing, but not coming to a crashing halt. So, why then has such a strong consensus formed around the need for Federal Reserve rate cuts? It has less to do with the current state of the economy, and more to do with what’s likely to happen in the future.”

“Survey data such as PMIs have shown weakness in recent months, and mentions of ‘tariffs’ and ‘uncertainty’ in the Fed’s Beige Book also spiked again in June. Central bankers are therefore trying to ease conditions just enough to stop any pessimism in the business community from snowballing into a fullblown recession, something that should keep the dollar depressed this year.”