Size and scope

Most investors expect the Fed to make a quarter-point rate cut at this meeting. But it’s possible that officials could opt for something more dramatic: In 2007, for instance, the Fed slashed rates by a half point as it tried to get ahead of slowing growth.

Back then, most economic indicators were holding up, but financial conditions were tightening and the housing market had sharply decelerated. This time around, the Fed’s hints that one or more rate cuts are coming have been enough to keep credit easily available.

Half-point cuts are appropriate “when time is of the essence, namely, in financial crises or if you’re behind the ball on economic data,” said Michael Feroli, the chief United States economist at J.P. Morgan. “Neither of those two situations seem to be the case right now.”

When investors interpreted a speech by John C. Williams, the president of the Federal Reserve Bank of New York, as a sign that the Fed might cut by a half point, his bank took the unusual step of clarifying that his comments were not meant as a policy signal. Many Fed watchers see that pushback as a hint that July’s move is likely to be small.

But that leads to another question: Will the Fed cut rates again this year? Markets think so.

What’s worrying the Fed?

Mr. Powell will have a chance to clarify what’s driving a cut — and his comments will help shed light on whether it will stand alone or if the Fed is sufficiently worried to consider additional moves down the road.