《Will the Fed cut interest rates in September? Powell chooses to "avoid the answer"》
In the adult world, no direct acceptance is rejection.
On the stage of the global economy, every move of the Federal Reserve is closely watched. Today, the remarks made by Federal Reserve Chairman Powell have made the market full of speculation about the future policy direction of the Federal Reserve.
Powell said at the Central Bank Forum held by the European Central Bank that the downward trend of US inflation is back on track, and inflation may return to 2% by the end of next year or the year after. At the same time, he emphasized that more confidence is needed before lowering the policy interest rate, and more data showing significant progress in reducing inflation is needed. In terms of the labor market, it is cooling down and the balance is moving in a better direction, but if the labor market is unexpectedly weak, this will prompt the Federal Reserve to make a decision.
However, when asked whether the Federal Reserve will start cutting interest rates in September, Powell chose to avoid answering. His attitude has triggered widespread discussion in the market. Tucker believes that Powell's ambiguity is not surprising, and he sticks to his consistent view that monetary policy has two-way risks. Cutting rates too early could reignite inflationary pressures, while the Fed could do unnecessary damage to the economy if it cuts too late.
Currently, the market is pricing in about a 70% chance of a rate cut by September. Powell did not elaborate on the timing of the rate cut, after all, there will be a lot of data coming out before the July and September meetings that will have an important impact on the Fed's decision.
