The Fed: The Federal Reserve will remain cautious in its interest rate decision, with a limited rate cut.

By: theblockbeats.news|2025/08/19 08:32:04
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BlockBeats News, August 19th: A recent report from the China Finance Research Institute stated that the market has significantly increased the pricing of a Fed rate cut. Internal divisions within the Fed have intensified, with voices both supporting a rate cut and advocating for a wait-and-see approach. U.S. President Trump and Treasury Secretary Mnuchin have also been pressuring the Fed, calling for a substantial rate cut. However, it is believed that the current economic conditions do not support a large rate cut. The biggest risk the U.S. currently faces is a "stagflation-like" scenario, and a rate cut may not resolve this contradiction. Monetary policy should still be centered around stabilizing inflation (expectations) rather than pursuing short-term growth or succumbing to political pressure. Therefore, it is judged that the Fed will remain cautious in its rate cut decisions and will not significantly ease. With both slowing employment growth and sticky inflation, the uncertainty in the monetary policy path will greatly increase. (FX678)

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