Will the Federal Reserve really lower interest rates in September? Closer than you think

Everyone is saying "Powell is going to pour cold water on it," but don't forget: the market is not foolish; 92% betting on a rate cut is not without reason.

1. Market sentiment is indeed fervent, but there are intricacies in capital flow

Retail investors are indeed going all-in on real estate and crypto, but institutions are not fully retreating; they are withdrawing while positioning themselves in interest-sensitive assets.

Wall Street openly calls for caution, but options positions and U.S. Treasury purchases have already hedged against the risk of "just in case of a rate cut."

2. Three main reasons for a rate cut

1) Accumulating growth pressure: Manufacturing PMI has been contracting consecutively, the real estate financing chain is tightening, and corporate debt refinancing pressure is immense.

2) Policy window: Biden's election year must stabilize the economy; the Fed needs to maintain its "independence" in words, but political pressure is real.

3) Financial stability takes precedence: Although U.S. stocks are strong, credit spreads have already widened; maintaining high interest rates equals suicide.

3. Inflation concerns are overestimated

The "super core" looks aggressive, but high-frequency components like rent and used cars have clearly cooled off.

Tariff impacts do exist, but the transmission is lagging; the Fed can totally cut once first and discuss later.

Employment data looks good, but leading indicators (temporary workers, hours worked) are weakening.

4. Possible actions from Powell on Friday

Verbal hawkishness: "data-dependent" and "not influenced by politics."

Physical dovishness: Not directly denying September, leaving a door open for the market.

5. Potential market reactions

If dovish: Real estate, tech, Bitcoin, and gold will soar directly.

If hawkish but leaves room: The market will drop then rise, increasing volatility.

If unexpectedly hawkish: It will provide a lower buying point.