Federal Reserve mouthpiece: Market focus turns to whether to cut interest rates for the second time this year, aggressive easing is still blocked by inflation

Nick Timiraos, a well-known Wall Street Journal reporter and known as the "Fed's mouthpiece", published a new article "Powell's rate cut signal reflects the delicate situation of the economy", saying that Federal Reserve Chairperson Powell is cautiously paving the way for next month's interest rate cut, but has sent a subtle message to those who expect aggressive easing - don't expect drastic action. The market has basically priced in September's interest rate cut, and the focus is turning 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 Fed: describing the labor market as showing "peculiar" signs of weakness despite low unemployment, while tariff-driven price increases are beginning to affect the economy. Powell largely adopted the interest rate cut argument of Fed Governor Paul Waller, who last month opposed Powell's decision to keep interest rates unchanged and supported a rate cut. Since then, the sharp employment data correction has confirmed concerns about a weak labor market. Powell waited for the data to validate this view - a necessary step that may have convinced skeptical colleagues. Some Fed governors saw a weak case for a rate cut because inflation was too high and labor market risks were exaggerated. Mr. Powell's speech made clear that he was still pursuing the soft landing he had long sought, but with significantly more complexity to contend with. The question is whether his new strategy can land the economy smoothly without stalling or running off the runway.