Group 1 - The recent statements from Mary Daly, President of the San Francisco Fed, indicate a significant shift in the Federal Reserve's policy stance towards a more dovish approach, suggesting that the timing for interest rate cuts is approaching due to signs of weakness in the U.S. labor market and the lack of sustained inflation from tariff policies [1][2] - The non-farm payroll report revealed only 73,000 new jobs added in July, with revisions to May and June data showing a downward adjustment of 258,000 jobs, marking an unprecedented 90% revision, which shattered market expectations of labor market resilience [1][2] - Market reactions to the non-farm data have been dramatic, with the probability of a rate cut next month soaring from under 40% to nearly 90%, and expectations for three consecutive rate cuts by the end of the year gaining traction [2][3] Group 2 - The Federal Reserve's policy considerations are balancing between "job preservation" and "inflation control," with the unemployment rate rising only slightly to 4.2%, indicating a relatively healthy level, yet various labor market indicators suggest a clear softening compared to last year [3][4] - Daly emphasized the need for flexibility in the Fed's approach, indicating that if inflation rises or the labor market improves, fewer than two rate cuts may be necessary, but if labor market weakness persists and inflation remains stable, further actions will be required [4] - The upcoming FOMC meeting in September will focus on two key data points: the August non-farm payroll report and core PCE inflation data, which will significantly influence the Fed's policy direction and market expectations [4]