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Strategist Interpretation: The likelihood of a rate cut in September has increased significantly, Powell may shift towards an easy monetary policy.
On August 22, market strategist Art Hogan stated that Powell is able to discuss the shift in risk balance, thus policies may need to be adjusted accordingly. This is a clear signal indicating his willingness to support future interest rate cuts, potentially in September, October, and December. In other words, the driving force clearly comes from the weakness in the labor market, rather than the core commodity price rises we see due to tariffs... The clear message being conveyed to the market is that a rate cut in September is now very likely.