On September 3, Fed official Mussa Lem said that the Fed's recent stance of keeping interest rates unchanged at a high level is consistent with the recent situation of inflation being higher than the target and the labor market performing strongly. He is skeptical that the Fed may cut interest rates at its September meeting.

After Fed Chairman Powell opened the door to interest rate cuts in a speech last month, interest rate cuts are now seen as the Fed's default option. Mussa Lem acknowledged that job growth has slowed, but he said the labor market still looks solid, with moderate unemployment and low initial jobless claims.

He believes that, on the other hand, there is still considerable uncertainty about inflation, especially given the pressure of tariffs. Nevertheless, traders generally expect that a majority of Fed members will support a 25 basis point rate cut in September, with a 90% probability. (Golden Ten)