Core Viewpoint - The Federal Reserve Chairman Powell is unlikely to provide clear guidance on interest rate cuts at the Jackson Hole meeting, with current market expectations for a 25 basis point cut in September facing resistance from the Fed [2][4][12]. Economic Environment - Despite a 100 basis point reduction in the benchmark interest rate over the past year, the macroeconomic environment in the U.S. is more severe than a year ago, necessitating rate cuts to counteract a slowdown in economic growth expected after 2025 [4]. - The downward trend in hard economic data may continue, and Powell's stance at the Jackson Hole meeting will be crucial [4]. Employment Data - The significant downward revision in the July non-farm payroll report initially caused panic, but market focus shifted to the "proportion" of revisions rather than "absolute values," leading to a decrease in recession fears [5]. - Weakness in employment is attributed to a decline in labor supply trends and short-term noise, which limits the report's impact on the likelihood of a September rate cut [5]. Inflation Indicators - The core Consumer Price Index (CPI) shows strength in services but weakness in goods, while a hotter Producer Price Index (PPI) has created some market disturbances without significantly suppressing the probability of a 25 basis point cut in September [9]. - Concerns about tariff-induced inflation in sensitive core goods are a primary worry for the market, although the increasing contribution of service inflation suggests a temporary positive outlook [9]. Fed's Rate Cut Outlook - The sentiment for a rate cut is bolstered by the expansion of potential candidates for the Fed Chair position, who are perceived as more dovish, indicating a more politically influenced Fed in the future [12]. - If Powell adopts a vague, hawkish tone at the Jackson Hole meeting, it may be a strategic move to counteract overly optimistic expectations for rate cuts [12][18]. Future Data Dependency - The decision for a September rate cut will heavily depend on the August non-farm payroll data, particularly the revisions and the unemployment rate's stability [14]. - Employment metrics are lagging indicators, and the deterioration in labor participation and employment rates suggests underlying weakness in the private sector [17].