Interest rate cuts probably aren't here just yet, but they could finally reach Americans in under 2 months

• The Federal Reserve is expected to hold interest rates steady in its July meeting.
• But it's looking more likely that rate cuts could come in September.
• Powell said he wants to move cautiously to avoid cutting rates too early.

It's safe to say that Americans can count on an interest rate cut pretty soon, but probably not this week.

On Wednesday, the Federal Open Market Committee will announce its next interest rate decision, and it's once again expected to hold rates steady. CME FedWatch , which estimates probabilities of interest rate changes based on market activity, forecasts a roughly 95% chance the Fed will not change rates as of Monday afternoon.

However, the FOMC's September meeting could finally bring Americans the relief they've been waiting for — CME FedWatch showed markets think it's all but certain the Fed will cut rates that month.

Cuts could be valuable for Americans struggling with high mortgage and credit card rates. Lower interest rates would make borrowing more affordable for consumers and businesses alike.

The Fed's high target interest rate "is putting pressure on the economy, is making it harder for consumers to buy," Claudia Sahm, chief economist at investment management firm New Century Advisors and former Fed economist, previously told Business Insider. "They have to take out credit. It's making it harder for businesses to invest."

Americans will likely have to wait a bit longer for those cuts, however. "A July Federal Reserve interest rate cut is unlikely but it will be debated and the decision second-guessed if we see weakening economic data over the next month or so," Greg McBride, Bankrate's chief financial analyst, said in written commentary. "The Fed will instead guide expectations toward a September rate move, pending continued improvement on the inflation front."

Data released in July showed inflation continued to slow down. The consumer price index increased 3.0% for the 12 months ending June, a cooler rate than the 3.3% in May. The Personal Consumption Expenditures price index also showed how inflation is getting closer to the Fed's 2% target. The year-over-year increase for this inflation indicator was 2.5%, just slightly cooler than the 2.6% rise in May.

There's also been a rebalancing in the labor market . Monthly job gains have been under 300,000 this year, except for the 310,000 in March. Plus, real GDP surged at an annualized rate of 2.8% in the year's second quarter, far above the 1.4% in the first quarter. Those numbers all point to the soft landing the Fed is looking for, during which the central bank can fight inflation while avoiding a recession.

The data has shown the economy is moving in the right direction, inching toward the Fed's 2% inflation target. Still, Fed Chair Jerome Powell has been clear that he does not want the central bank to move too quickly and cut rates too soon, running the risk of having to hike rates again at a later meeting.

"If we loosen policy too late or too little, we could hurt economic activity," Powell said before the Senate Committee on Banking, Housing, and Urban Affairs on July 9. "If we loosen policy too much or too soon, then we could undermine the progress on inflation."

Some economists and Democratic lawmakers have been urging the Fed to cut rates as soon as possible, given the economic progress the country has made. Sahm told Business Insider that "we have seen the US economy has been getting back on track, normalizing, rebalancing, all of the Fed's catchwords for some time now."

Despite the strong recent numbers, some commentators noted that the economy could slow later this year, pushing the Fed to speed up its rate cuts. "Though second-quarter GDP surprised to the upside, it holds that a downturn in the labor market or considerable financial market stress is much easier to envision," Matt Colyar, an economist at Moody's Analytics, said in written commentary shared with Business Insider. "For that reason, the Fed should start moving. After September's cut, we expect another in December and then a roughly quarter-point per quarter pace thereafter."

Democratic Sens. Elizabeth Warren, Jacky Rosen, and John Hickenlooper also sent a letter to Powell on June 10 urging him to cut rates, saying that keeping interest rates high is "threatening the health of the economy and risking a recession that could push thousands of American workers out of their jobs."

"You have kept interest rates too high for too long: it is time to cut rates," they wrote .