BlockBeats news, August 24, The Kobeissi Letter released the latest market analysis indicating that Federal Reserve Chairman Powell has actually yielded, and that the Fed will cut interest rates in a month, attributing it to 'weakness in the labor market.' Meanwhile, the PPI inflation rate has reached its highest level in three years, and the CPI inflation rate has been above 2% for 53 consecutive months.
To better understand what is happening, one must first understand the responsibilities of the Federal Reserve: the purpose of the Fed is to reduce unemployment and avoid inflation/deflation, which is the Fed's 'dual mandate.' Since 2021, the Fed has been highly focused on inflation. However, Chairman Powell's speech on Friday marked a significant shift: 'Changes in risk balance may require us to adjust our policy stance.' In other words, the Fed now believes that the risk of unemployment is greater than that of inflation, which almost confirms that an interest rate cut is imminent.