TechFlow, August 22 — According to Jinshi Data, Federal Reserve Chair Powell stated that the evolving economic risks provide a stronger rationale for interest rate cuts. These remarks indicate that Powell has aligned himself with the "dovish" faction of the Federal Open Market Committee responsible for setting interest rates, signaling he may support a 25-basis-point rate cut at the Fed's next meeting in September.
Although Powell acknowledged that the impact of government trade wars on consumer prices is now "clearly visible," he suggested such effects are unlikely to persist and may instead be a one-time shock that the central bank can afford to ignore.
He said, "Given that the labor market is not particularly tight and faces increasing downside risks, a sustained rise in inflation seems unlikely." He added, "Inflation faces upside risks while employment faces downside risks—a challenging situation."
