As Fed Chairman Powell is about to deliver an important speech, his deputy Nick shared an article from The Wall Street Journal, revealing the intense discussions within the Fed about the timing of interest rate cuts.

The core of this debate lies in the opposing views of the two camps. The Boston Fed advocates for an early interest rate cut, fearing that a delayed action could lead to a collapse in the job market. In contrast, the Cleveland Fed holds the opposite view, believing that an early rate cut could trigger a rebound in inflation.

This debate actually reflects the dilemma faced by policymakers: cutting interest rates too early may lead to a resurgence of inflation, affecting the purchasing power of the public; while delaying rate cuts may harm the job market, putting some individuals at risk of unemployment.

Currently, the Fed seems to be more inclined towards the "preventive rate cut strategy" proposed by Boston Fed President Collins. This strategy emphasizes closely monitoring economic data, especially the labor market and inflation indicators. Once a significant weakening in employment and a continued decline in inflation are observed, the Fed will swiftly take action to cut rates.

Nick's potential intention in sharing this article seems to be to balance market expectations, suggesting that Powell's upcoming speech may not provide a clear policy direction, but rather continue to emphasize that the Fed's decisions will be based on changes in economic data. This indicates that the Fed is still carefully weighing various factors to determine the best monetary policy path.

With the continuous changes in the global economic situation, the policy direction of the Fed will continue to be the focus of market attention. Investors and economists will closely monitor future economic data and the statements of Fed officials to predict potential policy adjustments.