"New Federal Reserve News Agency" speaks out: The Federal Reserve may signal a rate cut in September this week

According to the financial news app Smart Finance, the Federal Reserve will announce its interest rate decision early Thursday morning Beijing time. Renowned financial journalist Nick Timiraos, known as the "New Fed News Agency," stated in his latest article titled "Rate Cut Expected by the Federal Reserve" that the Federal Reserve is unlikely to adjust interest rates at the July policy meeting, but may hint at a rate cut in September. He believes that the recent preparations for a rate cut by the Federal Reserve reflect three factors: improvement in inflation, signs of cooling in the labor market, and a changing consideration of the risks of allowing inflation to remain at excessively high levels and causing unnecessary economic weakness.

Nick Timiraos did not disclose any information regarding potential rate cuts in the article. He emphasized that the Federal Reserve will set a timetable for the rate cut in September without any prior commitments. It is already a market consensus that a rate cut by the Federal Reserve in September has been fully priced in, including the pricing of a small probability of a 50 basis point rate cut.

Nick Timiraos stated that Federal Reserve officials are increasingly concerned about waiting too long and failing to achieve a soft landing, with progress in inflation and cooling in the labor market changing the Federal Reserve's risk considerations. The US core inflation rate has dropped from 4.3% a year ago to 2.6% in June, while the unemployment rate has risen from 3.7% at the end of last year to 4.1% in June.

Speeches by some Federal Reserve officials also reflect a shift in the Federal Reserve's risk considerations. New York Fed President Williams previously stated that the downward trend in inflation is broad and sustained, and he believes that the "last mile" of inflation is not as tricky as it seems, with different inflation indicators moving in the right direction and quite consistently. Fed Governor Waller stated in a recent speech that the labor market is currently in its best state, "we need to keep the labor market in this best state."

Chicago Fed President Evans emphasized that the current level of interest rates was set when inflation exceeded 4%, and now that inflation has dropped to around 2.5%, this means that the actual tightening of monetary policy has significantly increased, and there is no need to maintain such high restrictive interest rate levels when there are no signs of the economy overheating. San Francisco Fed President Daly warned that if you do not cut rates promptly when the labor market begins to decline, it will be very difficult to get the economy back on track, which is completely different from starting to raise rates two years ago