How to view the prospects of interest rate cuts in September #美7月PPI年率高于预期#

On August 14th, the US PPI data was released. If the earlier released CPI was like drinking warm water, then the just released PPI is a bit too hot to handle:
The total PPI increased by 0.9% month-on-month (expected 0.2%), marking the largest increase since June 2022. Year-on-year, it is 3.3%. The core PPI also rose by 0.9% month-on-month (expected 0.3%), the largest increase since March 2022, with a year-on-year rate of 3.3%. The significantly higher-than-expected PPI may further exacerbate the dilemma faced by the Federal Reserve. The question is whether to prioritize inflation control or employment.
Facing contradictory data, the degree of divergence in the September interest rate meeting may be even higher than in July. The potential attitudes of the voting committee for the September interest rate meeting are:
A 50 basis point rate cut. Federal Reserve governors Waller and Bowman (both nominated by Trump) may support this option.
A 25 basis point rate cut. Dovish Federal Reserve Governor Cook, Boston Fed President Collins, and moderate New York Fed President Williams and St. Louis Fed President Musalem (voting member) may support this option.
Maintain interest rates unchanged. Hawkish Kansas City Fed President Schmid and Chicago Fed President Goolsbee may support this option.
It seems that no matter how much the interest rate is cut, there may still be opposing votes. A more divided Federal Reserve could confuse the markets, making the ability of Fed Chair Powell to manage these differences increasingly important, while Powell himself has remained silent recently. The Jackson Hole Symposium, often referred to as the central bank's annual meeting, will be held from August 21 to August 23, during which Powell's speech will be particularly noteworthy. On one hand, we can gain insights into Powell's latest policy stance, and whether there will be an interest rate cut in September and by how much will become clearer. On the other hand, it is expected that Powell will announce the results of the Federal Reserve's five-year monetary policy framework assessment at this meeting, and adjustments to the Fed's monetary policy framework may occur.
What is the outlook for interest rate cuts in September?
The core reason lies in the need for the Federal Reserve to respond to the employment situation in the United States, and continuing to wait comes with a high cost for the Fed. The extent of interest rate cuts will depend on the combination of inflation and employment data. The data that the Federal Reserve can still obtain before the September monetary policy meeting (September 16 - September 17) includes:
Inflation data: July PCE, August CPI and PPI,
Employment Data: August Employment Report. Based on the data, the following scenarios may arise:
Interest rates cut by 50 basis points. Corresponding situation: August employment report significantly weakened, and inflation increased moderately.
Interest rate cut by 25 basis points. Corresponding scenarios: the August employment report shows moderate weakness, inflation rises moderately, or the August employment report shows significant weakness but inflation also rises significantly.
No interest rate cuts. Corresponding situation: August employment report slightly weakened or slightly strengthened, but inflation has risen significantly. Currently, this possibility seems to be the lowest.
What do you think the Federal Reserve will decide in September?