Analysis: Powell has actually yielded, the Fed will cut interest rates in September and blame it on "weak labor market."

ChainCatcher news, The Kobeissi Letter released the latest market analysis on the X platform, stating that Federal Reserve Chairman Powell has effectively yielded, and the Fed will cut interest rates in a month, attributing it to "weakness in the labor market."

Meanwhile, the PPI inflation rate has reached its highest level in three years, and the CPI inflation rate has been above 2% for 53 consecutive months. At this point, not holding assets will lead to underperformance in the market.

To better understand what is happening, it is essential to first grasp the responsibilities of the Federal Reserve: the purpose of the Fed is to reduce unemployment and avoid inflation/deflation, which is the Fed's "dual mandate."

Since 2021, the Fed has been highly focused on inflation. However, Chairman Powell's speech on Friday marked a significant shift: "Changes in the balance of risks may require us to adjust our policy stance." In other words, the Fed now believes that the risk of unemployment is greater than that of inflation, which almost confirms that an interest rate cut is imminent.