Institutions: Still do not believe that the Federal Reserve will cut interest rates this year, and inflation stickiness remains a key issue

On August 6th, Chris Brigati, Chief Investment Officer of SWBC, stated that he remains skeptical about the Federal Reserve's interest rate cuts this year. The most likely scenario is that there will be only one interest rate cut this year, and the likelihood of zero interest rate cuts is even higher. The Federal Reserve maintains a high degree of consistency in policy communication and maintains cautious patience in the decision-making process. This week, Trump will have the opportunity to appoint new members of the Federal Reserve Board, which will change the distribution of voting positions within the Federal Reserve. Brigati also stated that the core reason for his reserved attitude towards interest rate cuts is still the persistent issue of inflation stickiness. The Federal Reserve has repeatedly emphasized its high attention to inflation stickiness. Although they have previously downplayed the impact of employment data, their attitude seems to have loosened recently. However, unless more clear signs of a worsening job market are seen, the magnitude of interest rate cuts will be very limited. At present, we can only refer to the latest non farm payroll data as a limited indicator, but what is truly worrying is that inflation may continue to remain high or even intensify. If the Federal Reserve cuts interest rates when inflation remains high or rebounds, it will inevitably trigger new policy dilemmas.