The Federal Reserve (FED) Chairman Powell released multiple important signals in the semi-annual monetary policy testimony, sparking intense discussions in the market about the possibility of an earlier interest rate cut.

Recent U.S. inflation data has shown the mildest trend in 20 months, with falling energy prices and a cooling job market bringing a double boost to the economy. Powell said that if inflation data remains stable, The Federal Reserve (FED) may significantly advance the timetable for interest rate cuts.

Wall Street analysts predict that if the year-on-year core PCE remains below 2.8% in September, the first rate cut may be brought forward to November. This forecast has triggered a strong market reaction, with interest rate futures on the Chicago Mercantile Exchange showing a 37% sharp increase in bets on the implementation of easing policies starting in September.

September seems to be a key time for the policy shift of The Federal Reserve (FED). The global financial markets are closely watching this significant monetary policy adjustment that may change the global economic landscape, and the countdown to the start of the rate cut cycle has entered its final stage.

However, despite the general market optimism about the prospect of interest rate cuts, there is still uncertainty about the specific timing and extent of implementation. The Federal Reserve (FED) still needs to balance multiple factors such as inflationary pressures, employment conditions, and economic growth to ensure the precision and effectiveness of policy adjustments.