U.S. Treasury Secretary Becerra: The Federal Reserve will definitely cut interest rates in September! Trump's tariffs haven't made inflation worse.

U.S. Treasury Secretary Becerra claimed that if tariffs are not the main cause of inflation, the Federal Reserve must lower interest rates by September at the latest! Wall Street is also betting early, as the upcoming CPI and employment data will determine the policy direction. (Background: Powell did not rule out the possibility of a rate cut in July, stating that if tariffs were not involved, interest rates would have already been cut, and tariffs are likely to have an impact on inflation.) (Context: On the first day of Powell's congressional testimony, he made a significant shift: he did not rule out an early rate cut, but emphasized that the economic data in June and July are more important.) U.S. Treasury Secretary Scott Becerra pointed out on Fox News' "The Ingraham Angle" that tariffs are not the main factor driving up prices, and stated that "the Federal Reserve will not wait later than September to lower interest rates." This statement immediately drew global capital's attention back to the Federal Reserve's next steps. Trump and the Treasury Department jointly urged Becerra, who criticized the current 4.25 – 4.50% interest rate range as "incomprehensible" in light of easing inflation, and questioned the Federal Reserve's view of tariffs as a potential source of inflation. His stance aligns with President Trump's repeated public calls for a rate cut, with Becerra emphasizing on the program: "Tariffs are not an inflation factor. If the Federal Reserve truly considers this as a standard, they could have cut rates earlier, but they certainly won't do it later than September." Wall Street bets on an earlier cut. Becerra is not the only heavyweight calling for a cut. Goldman Sachs, in a forecast released on July 2, brought forward the timing of the first rate cut from October to September, with a probability slightly above 50%, and expects two more cuts before the end of the year. The CME FedWatch tool also shows that futures traders bet on a 25 basis point cut in September and December. Although the Federal Reserve kept interest rates unchanged at the June meeting, the dot plot has already indicated a median expectation of two rate cuts this year, with the official and market timelines gradually aligning. The Federal Reserve's "Five Key Indicators" The Federal Reserve's policy remains "data-driven," with core observations focused on: Inflation: If CPI remains above 2%, there is limited room for rate cuts; recent trends have slowed, favoring a policy shift. Labor Market: Low unemployment rate but declining wage growth; if the unemployment rate rises further, the incentive to lower rates increases. GDP and Output Gap: When growth slows, adjusting interest rates helps support demand. Financial Conditions and Liquidity: If the market contracts due to high rates, a rate cut can release funds. Global and Geopolitical Factors: Tariffs and conflicts bring cost variables, though Becerra believes the impact is overestimated. Currently, external calls and model estimates are targeting a rate cut in September, but Federal Reserve Chairman Powell has repeatedly reiterated that "data will determine the decision." The next two employment reports and August CPI will become the final deciding factors. If inflation continues to converge and employment remains relatively weak, a rate cut will be a natural outcome; conversely, interest rates may remain unchanged. Related Reports: Federal Reserve keeps June rates unchanged》What do Powell and the Fed's dot plot reveal? Bitcoin fluctuates at $105,000; rate cuts dampen enthusiasm》Federal Reserve's Kashkari: Trump's tariff impacts on inflation are not a short-term phenomenon, Fed should not rush to adjust interest rates. Japan loses its 34-year status as the "largest bond country," as the central bank reduces long-term bond issuance to save Japanese bond yields. <U.S. Treasury Secretary Becerra: The Federal Reserve will definitely cut rates in September! Trump's tariffs have not made inflation worse.> This article was first published on BlockTempo, the most influential blockchain news media.