There is no reason why the FED should cut rates.
They have a dual mandate: job and inflation.
We are on the right track on the job side, and the US is at nearly full employment.
On the inflation side, data is getting hotter and hotter, and the tariff situation will add some pressure to the scenario.
I don’t understand why JP could raise rates.
The only reason the FED could cut rates is the political pressure from the White House. Powell's problem is that he has to have the Board of Governors on his side, but sadly, they are concerned about re-election.
We have witnessed Trump repeatedly pressuring Powell to lower interest rates, especially in the last two months, even resorting to intimidation and threats of dismissal.
Powell's speech a few days ago indicated the possibility of an interest rate cut, but it still left an uncertain impression.
September appears to be a crucial month, especially for major shifts across all markets. Key data points to watch include the JOLTS report on September 3, the unemployment rate and NFP data on September 5, the PPI data on September 10, the CPI data on September 11, and the September 18 decision on whether to cut the 4.50% interest rate. If the data released throughout September points toward a positive outlook for an interest rate cut, the most likely reduction would be 50 basis points, with 25 basis points being the primary focus.
I really hope for cutting interest rates because with that the entire market will receive fresh air.