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Cailianshe News, July 18 (Editor: Shi Zhengcheng)In the early hours of Thursday morning Beijing time, the Federal Reserve, as usual, released the Beige Book, which records the economic conditions and anecdotes of the 12 regional Federal Reserve systems, two weeks before the July interest rate meeting. As Powell and other officials have maintained high interest rates for nearly a year, the slowdown in US economic growth and consumption downgrades are becoming more common.

(Source: Federal Reserve)

Coincidentally, in the face of Trump's threat of "not allowing interest rate cuts", several Federal Reserve officials also publicly discussed the prospects of interest rate cuts on Wednesday.

Overall stability and headwinds quietly gain momentum

In a routine summary, the Beige Book stated that during the last reporting period,Employment in the United States increased only "slightly" and labor turnover also declined, with employers in many regions saying they would be more cautious in hiring and would not fill all vacancies.

The biggest change in this report is thatFive of the 12 Federal Reserve districts reported steady or declining economic activity, three more than in the last report released in late May.

U.S. businesses also generally expect the slowdown in economic growth to continue. The report said that due to uncertainty about the upcoming election, domestic policies, geopolitical conflicts and inflation,People's expectations for the future economy are that growth will slow down in the next six months.

The economic stories reported by various regions also show that American companies, workers/consumers are sinking deeper and deeper into the quagmire of inflation and economic slowdown. The report said that almost every region reported such things as "retailers discounting goods" and "consumers only buy necessities, downgrade consumption, buy fewer goods, or look around for cheaper goods."

In addition to this common problem, each region also mentioned its own unique situation. For example, the Boston Fed said that the outlook for office properties has further deteriorated, and local contacts expect the number of foreclosures to increase significantly in the next 12 months. The New York Fed reported that local nurseries are too expensive/inaccessible, causing some workers to stay at home to take care of their children. The Cleveland Fed shared that a large local retailer pointed out that low-income consumers have turned to other supermarkets with lower prices.

Fed official: rate cut is 'getting closer'

Although former US President Trump aggressively stated that he did not want the Federal Reserve to cut interest rates before the November election,Federal Reserve Board Governor Christopher Waller and New York Fed President John Williams both said on Wednesday that with improving inflation data and signs of a cooling labor market, they expect a situation suitable for a rate cut will soon be reached, although further evidence is still needed.

According to current market expectations, the Federal Reserve's policy meeting in two weeks will still maintain no interest rate cut, but there is a high probability that a rate cut will be initiated at the September meeting, which will also be the last interest rate meeting before the November 5 election.

“While I don’t think we’ve reached our final destination, I do believe we’re getting closer to the point where we’ll need to cut rates,” Waller said in a speech in Missouri on Wednesday.

Williamstold the media that inflation data from the past three months "brings us closer to the downward trend in inflation that we are looking for."

Taking the September 17-18 meeting as a node, the Fed officials will still have two months of inflation and employment data to look at. Waller said bluntly,If the next two CPI data are "favorable," he could envision a rate cut "in the near future."