The Federal Reserve's recent signal of 'holding steady' has been made crystal clear by Harker's shout — September rate cut? Not a chance! 😂 As the president of the Cleveland Fed and a hawkish leader, she directly doused cold water on the market: inflation is still hovering above 3%, and core service prices are sticking around like chewing gum, so why on earth would there be a rate cut?

Just look at the latest data: July's core CPI year-on-year is 3.1%, PPI has surged 0.9% month-on-month, and even used car prices are rebounding. Harker's sharp eyes have already spotted these 'inflation tail ends,' especially the rising prices of housing and medical services, fearing that a rate cut would give inflation a new lease on life. What's even more extreme is that she brought out the tariff 'time bomb' — if Trump suddenly raises tariffs, businesses might not be able to bear the costs and inflation could stage a 'counterattack' in no time.

However, the market is not buying it, with a 93.8% probability betting on a 25 basis point rate cut in September, and some even fantasizing about a 'shock' of 50 basis points. This is understandable given that July's non-farm payrolls plummeted to 73,000, the previous value was even revised down by 100,000, and the unemployment rate quietly crept up to 4.2%. But Harker isn't buying into this narrative: 'A weak job market? That's just a smokescreen from data revisions!' She places more importance on the wage growth still above 4% and the month-on-month resilience of consumer spending at 0.5% — in plain terms, people still have money in their pockets, and the economy hasn't reached 'ICU' status, so why rush for a rate cut?

The most interesting part is the 'palace intrigue' within the Federal Reserve: the doves Waller and Bowman are clamoring that 'if we don't inject liquidity soon, the job market will collapse,' while hawks Goolsbee and Harker insist 'as long as inflation is alive, rate hikes will continue.' But Harker has a trump card — the Cleveland Fed she represents is the most aggressive institution in the U.S. when it comes to tracking inflation, even accounting for the lagging effects of rising rents clearly. With this strong stance, she is clearly trying to put the brakes on the doves, to prevent Powell from inadvertently releasing easing signals at the Jackson Hole annual meeting.

In short, Harker's strategy is called 'offensive as a defense': first laying down the law that a September rate cut is off the table, to prevent the market from over-speculating; at the same time, she is giving businesses and investors a warning — don't think you can rely on a rate cut to survive, just honestly digest the high interest rates. As for the final outcome? It depends on whether the August CPI and non-farm data will be favorable.