【Federal Reserve Mouthpiece: Market Focus Shifts to Whether There Will Be a Second Rate Cut This Year, Aggressive Easing Still Blocked by Inflation】Golden Finance reports, (Wall Street Journal) renowned journalist and known as the 'Federal Reserve Mouthpiece' Nick Timiraos published a new article (Powell's Rate Cut Signal Reflects Delicate Economic Situation), stating that Federal Reserve Chairman Powell is cautiously paving the way for a rate cut next month, but has conveyed a subtle message to those expecting aggressive easing — don't count on drastic actions. The market has largely priced in a rate cut in September, and the focus is shifting to whether the Federal Reserve will consider another rate cut at its last two meetings this year (October and December). Powell's cautious tone reflects the complex economic dynamics facing the Federal Reserve: describing the labor market as showing 'peculiar' signs of weakness despite low unemployment, while tariff-driven price increases are starting to affect the economy. Powell has largely adopted the rate cut argument of Fed Governor Waller, who opposed Powell's decision to keep rates unchanged last month and supported a rate cut; subsequent large revisions to employment data confirmed concerns about labor market weakness. Powell is waiting for data to validate this view — which may be a necessary step to persuade skeptical colleagues. Some Fed governors believe the rationale for a rate cut is weak because inflation is too high and the risks to the labor market are exaggerated. Powell's speech clearly indicates that he is still pursuing the long-sought soft landing, but the complex situations that need to be addressed have significantly increased. The question is whether his new strategy can achieve a smooth landing for the economy, without stalling or veering off the runway.
