Fed official Musalem is skeptical about a possible rate cut in September.

On September 3rd, Fed's Moussailem stated that the Fed's recent stance of keeping interest rates high is consistent with recent inflation being above target and a strong performance in the labor market. He expressed skepticism about the possibility of a rate cut at the Fed's September meeting. After Fed Chair Powell opened the door to rate cuts in a speech last month, a rate cut is now viewed as the Fed's default option. Moussailem acknowledged the slowdown in job growth, but he stated that the labor market still appears solid due to a moderate unemployment rate and low initial jobless claims. He believes that, on the other hand, there is still considerable uncertainty regarding inflation, especially considering the pressures from tariffs. Nevertheless, traders still widely expect that a majority of the Fed's members will support a 25 basis point rate cut in September, with a probability of 90%. (Jin10)