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Powell is playing Tai Chi.
Is a September rate cut a "Schrödinger's cat"?
On July 31st, Nick Timiraos, the Fed's "mouthpiece," posted on social media, directly pointing out that Fed Chairman Powell has adopted a "hardline defensive stance" regarding whether a September rate cut will occur.
When bombarded with leading questions from reporters, asking, "What scenarios would trigger a September rate cut?" Powell's response was simply stunning: "I won't give a specific answer. We need to observe how the data evolves, and there are multiple possibilities. We will make decisions based on comprehensive data analysis and a balanced assessment of the risks." This is like playing a mysterious "guessing game," leaving all parties in the market scratching their heads.
Potomac Research also jokingly said, "If we're hungry, we'll eat." The implication is that a rate cut will happen when it's time, but no one can predict it right now. Will a September rate cut actually happen? Like Schrödinger's cat, anything is possible until the outcome is known. What are the Fed's underlying considerations? What impact will this have on financial markets? Let's keep an eye on it!
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