“Based on changes in the outlook and the balance of risks, our policy stance may need to be adjusted.” On August 22 local time, Federal Reserve Chair Jerome Powell made these remarks at the Jackson Hole Global Central Bank Annual Meeting. The market widely interpreted this statement as a signal of a rate cut in September.

Despite this, the outlook for the Fed’s monetary policy remains fraught with uncertainty. While signaling a potential rate cut, Powell did not commit to a specific path for monetary policy. Internal divisions within the Fed and external political pressures are “grilling” the institution, adding further suspense to its monetary policy trajectory.

Last year, Powell stated at the Jackson Hole Global Central Bank Annual Meeting that “now is the time to adjust policy,” sending a clear signal for rate cuts. This year, although Powell’s remarks completed a dovish pivot, the overall restrained and cautious tone also planted new doubts.

Currently, the Fed is facing dual “grilling” from internal divisions and external political pressures.

On one hand, the Fed内部 does not seem to have reached a consensus on Powell’s rate cut signal. Alberto Musalem, President of the St. Louis Federal Reserve Bank, stated on August 22 that current U.S. inflation remains above the Fed’s 2% target, and risks in the job market have not yet fully materialized. He emphasized the need for more data before deciding to support a rate cut in September.

On the other hand, political pressure and personnel changes have also left the Fed “troubled.” U.S. President Donald Trump has long been dissatisfied with Powell’s delay in cutting rates, repeatedly claiming that the Fed Chair has “acted too slowly” on rate reductions. Beyond verbal pressure, Trump has also repeatedly interfered with Fed personnel changes, not only nominating Stephen Milan, Chair of the White House Council of Economic Advisers, as a Fed governor but also seeking a successor to Powell.

Recently, Trump has turned his attention to Fed Governor Lisa Cook. On August 20, Bill Pult, Director of the Federal Housing Finance Agency, publicly accused Cook of simultaneously declaring two properties as her “primary residence” to obtain more favorable loan rates and submitted a criminal complaint to the Department of Justice. Later that day, Trump shared related reports on social media, stating, “Cook must resign.” On August 22, Trump further stated, “If she doesn’t resign, I will fire her.”

Under multiple pressures, the Fed’s future monetary easing path remains challenging. Powell emphasized that monetary policy has no preset path and that Federal Open Market Committee members will make decisions solely based on their assessment of the data and its impact on the economic outlook and risk balance. This means that data such as the August Consumer Price Index and non-farm payrolls will be key references for September’s monetary policy decisions.

A research report from Minsheng Securities suggests that for the Fed, its statements at the Jackson Hole Global Central Bank Annual Meeting may not signify a “complete compromise” but rather保留了 room for choice: On one hand, Powell emphasized that there is “no preset path” for monetary policy, further reinforcing data dependency. Subsequent decisions will be entirely based on the assessment of data and its impact on the economic outlook and risk balance, without being entirely “driven” by market expectations for rate cuts or political pressure. On the other hand, the Fed can also use September’s dot plot and SEP economic projections for additional expectation management, retaining a “backup move” in monetary policy.