San Francisco Federal Reserve Bank President Mary Daly warned that the job market is weakening, and interest rate cuts have become a real option for the Federal Reserve at its upcoming meetings, with the market betting on a rise in the likelihood of action in September. (Background: False prosperity! U.S. non-farm payrolls in July were far below expectations, with the revisions for May and June down by 258,000 jobs; Trump criticized Powell and fired the Labor Department head.) (Additional context: Taiwan's 20% tariff) The New Taiwan dollar depreciated beyond 30, hitting a two-month low, and next week's semiconductor tariffs are the real threat.) Could interest rate cuts come sooner than expected? On Monday (4th), the normally cautious San Francisco Federal Reserve Bank President Mary Daly pointed out to the media that the U.S. labor market is weakening, and the price pressures from tariffs have not yet continued to spread, suggesting the Fed is just one step away from cutting rates. Signals for rate cuts are becoming clearer. Daly stated that the decision to maintain the interest rate range at 5.25% to 5.50% last week means that long-term inaction is no longer possible. She reminded that from now on, 'every meeting is a live meeting,' and rate cuts will depend on the data. When faced with reporters' questions, she candidly said: I am willing to wait another cycle, but I cannot wait indefinitely. In the June dot plot, most decision-makers expected two rate cuts this year, each by 0.25 percentage points. Daly reaffirmed that this path 'is still well calibrated,' but added that the real key is not when to act in September or December, but 'whether' to act. At the same time, she believes that if the labor market weakens more rapidly, the number of rate cuts may exceed two. Fedwatch data predicts that the probability of the Fed cutting rates by a quarter point in September is as high as 94.4%. The labor market is slowing down. The key to Daly's shift in attitude is the latest non-farm report published last Friday, which showed that only 73,000 jobs were added in July, far below the average level of the past three years, and the unemployment rate slightly rose to 4.2%. Even more concerning for the market is that the employment growth for May and June was significantly revised down, indicating that the cooling of labor demand is no longer an isolated incident. She pointed out that if action is taken only after employment weakens comprehensively, policy transmission could take six months to a year, by which time the damage to the labor market may be irreversible. We know that stabilizing prices and maintaining full employment are the Fed's most important dual mandates, and at this stage, it may lean towards protecting the labor market. Inflationary pressures have temporarily eased. Regarding the market's original concerns that a new round of tariffs would drive up inflation, Daly believes that the related impacts are currently still 'one-time' and limited in scope. She mentioned that companies are sharing import costs through supply chains, and the service sector is seeing housing and some service prices soften, indicating that overall price momentum is not out of control. Policy paths and market pricing Before the September Fed meeting, two non-farm reports and several inflation indicators will be released, and the data will influence the terminal interest rate level and the pace of rate cuts. If employment continues to slow while inflation steadily approaches the target of 2%, the Fed may increase this year's expected rate cuts from two to three. Conversely, if prices rise again, decision-makers will also retain the space to pause actions. In the dual context of weakening employment and no deterioration in inflation, rate cuts seem to have become a certainty. Ultimately, when the Fed pulls the trigger will determine whether the U.S. economy can achieve a soft landing, and it will also affect the reshaping of global investment landscapes. Related reports: Trump angrily fires the Labor Statistics Bureau head! When 'truth' becomes a toy of presidential power, the U.S. economy is plunging into a blind storm. The U.S. sends nuclear submarines to threaten Russia! Trump: Medvedev's remarks are too provocative; I just want to stop the Russia-Ukraine war. Trump revealed he once considered 'splitting Nvidia' but found it too strong; Huang Jenxun responded with praise. "Fed's Daly: The timing for rate cuts is approaching, and this year there may be more than two (the September probability is nearly 95%)." This article was first published in BlockTempo (the most influential blockchain news media).