Fed Mouthpiece: Market Focus Shifts to Whether There Will Be a Second Rate Cut This Year, Aggressive Easing Still Hindered by Inflation

According to a report by Jinse Finance, Nick Timiraos, the renowned Wall Street Journal journalist often referred to as the "Fed Whisperer," published a new article titled "Powell’s Rate Cut Signal Reflects the Economy’s Delicate Position." The article states that Federal Reserve Chair Jerome Powell is cautiously paving the way for a rate cut next month, but is sending a subtle message to those expecting aggressive easing—not to count on bold moves. The market has largely priced in a rate cut for September, and attention is now shifting to whether the Fed will consider further cuts at its final two meetings of the year (October and December). Powell’s cautious tone reflects the complex economic dynamics facing the Fed: he describes the labor market as showing "peculiar" signs of weakness despite low unemployment, while tariff-driven price increases are beginning to impact the economy. Powell has essentially adopted Fed Governor Waller’s arguments for a rate cut; last month, Waller opposed Powell’s decision to keep rates unchanged and supported a cut, and subsequent significant revisions to employment data have confirmed concerns about labor market weakness. Powell is waiting for data to validate this view—a step that may be necessary to persuade skeptical colleagues. Some Fed officials believe the case for a rate cut is weak, citing persistently high inflation and what they see as overstated risks in the labor market. Powell’s speech made it clear that he is still pursuing the long-sought soft landing, but the complexity of the situation he must navigate has increased significantly. The question is whether his new strategy can guide the economy to a smooth landing—neither stalling nor veering off course.