Analysis: Powell has effectively caved, September rate cut a 'done deal'
BlockBeats News, August 24th, The Kobeissi Letter released its latest market analysis stating that Fed Chair Powell has effectively given in, with the Fed set to cut rates a month from now, blaming it on "weak labor market." Meanwhile, the PPI inflation rate has reached its highest level in 3 years, and the CPI inflation rate has remained above 2% for 53 consecutive months. At this time, not holding assets will lag behind the market.
To better understand what is happening, it is necessary to first understand the Fed's responsibilities: The Fed's purpose is to reduce unemployment and avoid inflation/deflation, which is the Fed's "dual mandate." Since 2021, the Fed has been highly attentive to inflation. However, Fed Chair Powell's Friday speech marked a significant shift: "A change in the balance of risks could require a readjustment of our policy stance." In other words, the Fed now sees the risk of unemployment as greater than inflation, almost confirming that a rate cut is imminent.
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