Analyst: Powell is more decisive, not ruling out another 50 basis point rate cut this year!

The Federal Reserve made a bold move last week by cutting interest rates by 50 basis points, despite internal disagreements over the magnitude of the rate cut. However, Powell believes that a more proactive monetary policy is necessary to guard against risks in the labor market.

Currently, most officials support lowering the benchmark interest rate by one percentage point or more this year, indicating that there will be at least one significant rate cut in the future. The only dissenting voice against Powell's rate cut decision, Bowman, has suggested that rate cuts should be more cautious.

Tonight, after the release of the Fed's "favorite" inflation indicator, Powell will deliver a pre-recorded video as the opening remarks for an event. These key data and information will further guide the Fed's future rate-cutting pace.

A significant rate cut will be supported if the labor market weakens further

Recently, some economists have indicated that as long as inflation cools down, Powell will prioritize keeping the economy close to full employment. Therefore, if economic data starts to weaken, the possibility of another 50 basis point rate cut cannot be ruled out.

In other words, if labor market data disappoints, the likelihood of Powell making a significant rate cut in the coming months will increase.

Matthew Luzzetti, Chief U.S. Economist at Deutsche Bank, stated that based on Powell's remarks at the Jackson Hole Symposium and the information released during the press conference, he believes that if the labor market weakens further, Powell will lean towards another 50 basis point rate cut.

Despite the possibility of rates peaking last December and some officials being surprised by rising inflation, Powell remained steadfast until he was confident in the slowdown of price pressures.

This month, he opted for a significant rate cut, believing that the previous high rates were cooling the economy rather than harming it, and that the cost of inflation suppression on employment was lower than many economists' expectations.

"Successfully achieving these goals is important for all Americans," he stated during a press conference on September 18th