"Fed Megaphone" Prediction: Fed rate cut finally comes into view

Nick Timiraos, the "Fed Mouthpiece," said in his latest article that while Fed officials are unlikely to cut interest rates next week, developments in inflation and the labor market should lead officials to signal a rate cut at the September meeting. Powell, who prefers to act early, has been weighing the risks of cutting rates too early and waiting too long, an issue that will be addressed at next week's meeting. Officials want more evidence that inflation is indeed cooling before crossing the threshold for rate cuts. Still, officials are increasingly concerned that waiting too long will lead to a soft landing bubble. The Fed's readiness to cut rates reflects three factors: positive inflation, a cooling job market, and changing considerations of the dual risks of allowing inflation to remain too high and causing unnecessary economic weakness. (Jinshi)