Analyst: Subsequent Fed rate cuts extremely challenging in terms of communication

On July 31, Facet's Chief Investment Officer Tom Graff stated that the Federal Reserve is clearly in a tricky position. Logically, they anticipate that the new tariffs will bring a certain degree of inflation. Ideally, the Fed would like to wait until inflation peaks before considering cutting interest rates. However, the pressure is mounting, and even without external pressure from the White House, the recent weakness in the labor market is enough to worry the Fed.

In fact, this is likely why Waller and Bowman voted against holding interest rates steady and advocated for a rate cut at this meeting. I believe that this resolution lays the foundation for the Fed to start cutting interest rates at the September meeting, and possibly cut rates another 1 to 2 times within the year. The problem is that even though prices may rise, the Fed still needs to start cutting interest rates, which will be extremely challenging from a communication perspective. And Trump's continued pressure on interest rates further exacerbates this communication difficulty.

At that time, Powell may be seen by the outside world as succumbing to Trump's demands. But if job growth continues to weaken, the possibility of the economy falling into recession will continue to rise, and Powell will no longer be able to ignore it at that time. [BlockBeats]