The latest Fed observation data reveals a striking trend: the likelihood of a 25 basis point rate cut by the Fed in September is as high as 87.3%. This data strongly suggests that, unless an unexpected situation arises, a rate cut in September is almost a certainty.

Recently, the game between Fed Chairman Powell and former President Trump has been going on for quite some time. By delaying the timing of interest rate cuts, Powell has, to some extent, maintained his position and credibility. Even if inflation rates rebound in the future, Powell has already provided a reasonable explanation for his decisions.

It is worth noting that the Fed is likely aware that the U.S. economy is entering a contraction period. In this case, continuing to adhere to a high interest rate policy seems to have lost its meaning. Due to prudent considerations regarding the economic outlook, lowering interest rates has become a reasonable choice.

This potential shift in monetary policy not only reflects the Fed's assessment of the current economic situation but also embodies its efforts to seek a balance between maintaining economic stability and promoting growth. If a rate cut is indeed realized in September, it would mark an important turning point in U.S. monetary policy, potentially having profound effects on financial markets and the overall economy.

However, we should also recognize that the effects of monetary policy often have a lagging nature. While interest rate cuts may stimulate economic activity in the short term, their long-term effects will take time to observe and assess. Investors and market participants should closely monitor the Fed's subsequent statements and economic data to better grasp the direction of the future economy.