Fed voting members this year send cautious signals: Emphasizing the hope to ensure no forced rate hikes after starting to cut rates

On Tuesday, Atlanta Fed President Bostic, a voting member of the FOMC this year, stated that more data is still needed, and the Fed may cut interest rates by the end of the year. Before supporting a rate cut, he needs to see more data and emphasized his desire to ensure that the Fed does not change course after starting to cut rates. "We want to be absolutely certain. If we start cutting rates and then have to raise them again, that would be very bad." Bostic reiterated his stance since March that he may be ready to cut rates by the end of this year. Bostic joined other Fed officials who are opposed to taking more aggressive actions on monetary policy to varying degrees. Currently, the market's expectations for a Fed rate cut are more aggressive, with investors believing that there is over a 50% chance of a 50 basis point cut in September, according to the futures market. Bostic also acknowledged that he is encouraged by recent inflation data. Data released on Tuesday showed that the U.S. July PPI fell well below expectations, with a year-on-year increase narrowing to 2.2%, and service costs declining for the first time this year. The market will closely watch the heavyweight CPI data to be released on Wednesday for more signals on cooling inflation. Recently, several data points in the U.S. labor market have been weaker than expected, raising concerns about whether the Fed is waiting too long to start cutting rates. Bostic expressed concern about the rise in the unemployment rate, but added that this increase is largely due to an increase in labor supply rather than a decrease in demand. This is a good problem to have. Although there has been a clear downward trend in the U.S. labor market recently, with many signs of softening in the economy and inflation continuing to cool as expected, Bostic, like other Fed policymakers, is cautious about future actions, hoping to avoid cutting rates too early and causing a major policy reversal. Investors will turn their attention to the global central bank meeting next week in Jackson Hole, Wyoming. Although the agenda for the meeting has not been announced, it is expected that Fed Chair Powell will deliver a speech and may provide more clues on the September Fed meeting