#ETH Powell "joined" the PI camp, stating that economic risks provide more reason for interest rate cuts.

Federal Reserve Chairman Powell stated that the constantly "changing" economic risks provide the Federal Reserve with more substantial reasons to cut interest rates. This statement indicates that Powell has aligned himself with the "dovish" camp within the Federal Open Market Committee responsible for setting interest rates, and it signals that he may support a 25 basis point rate cut at the Fed's next meeting in September. Although Powell acknowledged that the impact of the government's trade war on consumer prices is now "clearly visible," he suggested that this impact is unlikely to be sustained and may only be a one-time shock that the central bank can ignore. He stated, "Given that the labor market is not particularly tight and faces increasing downside risks, (the outcome of continued rising inflation) seems unlikely to occur." He also added, "Inflation faces upside risks, while employment faces downside risks, which is a rather challenging situation."