Beijing time Thursday morning, July 18th, Caixin reported that the Federal Reserve, as usual, released its "Beige Book" which recorded the economic conditions and anecdotes of 12 regional Federal Reserve systems two weeks before the July interest rate meeting. As Powell and other officials continued to insist on high interest rates for nearly a year, phenomena such as the slowing down of the US economy and degraded consumption are becoming more common.

(Source: Federal Reserve)

Coincidentally, faced with Trump's threat of "no rate cuts," multiple Federal Reserve officials also spoke openly on Wednesday about the prospects for rate cuts.

Overall stability, a headwind is quietly forming.

In the summary of routine matters, the Beige Book stated that in the previous reporting period, US employment only "slightly increased," labor mobility also declined, and multiple employers in various regions clearly expressed that they would be more cautious about recruitment and not fill all vacant positions.

The biggest change in this report is that in the 12 regional Federal Reserve districts, five regions reported that economic activities were stable or declining, an increase of three from the previous report released at the end of May.

American companies also generally expect the slowdown in economic growth to continue. The report states that due to uncertainties about upcoming elections, domestic policies, geopolitical conflicts, and inflation, people expect the future economy to slow down in the next six months.

From various economic stories reported across regions, it can be seen that American companies, laborers/consumers are getting deeper and deeper into the swamp of inflation and economic slowdown. The report stated that almost every region has reported such events as" retailers discounting goods," "consumers only purchasing necessary items, product downgrading, and purchasing fewer goods, or searching for cheaper goods everywhere."

In addition to these common issues, various regions also mentioned their unique conditions. For example, the Boston Federal Reserve stated that the front outlook for office property has deteriorated further, and local contacts expect the number of foreclosures to increase significantly over the next 12 months. The New York Fed reported that local nurseries were too expensive/too full, causing some workers to stay at home to take care of their children. The Cleveland Fed shared that a large retail chain in the area pointed out that low-income consumers have turned to other supermarkets with lower prices.

Federal Reserve Officials: Rate cuts are "getting closer."

Although former US President Trump expressed his desire for the Federal Reserve to not cut rates before the November election, Federal Reserve Board Member Christopher Waller and New York Fed President John Williams both stated on Wednesday that with inflation data improving and signs of cooling labor markets, although further evidence is required, the expected appropriate time for rate cuts will soon arrive.

According to current market expectations, the Federal Reserve policy meeting in two weeks' time will maintain interest rates unchanged, but it is highly probable that the September meeting will initiate rate cuts, also the last interest rate meeting before the November 5th election.

In his speech in Missouri on Wednesday, Waller said:"Although I don't think we've reached our final destination, I believe we are gradually approaching the time when we need to cut interest rates."

Williams told the media that inflation data from the past three months "brings us closer to the inflation decline trend we are looking for."

Taking the period around the September 17-18 meeting as a node, until then, former Federal Reserve officials have two months to see inflation and employment data. Waller frankly stated that if the next two CPI data "are positive," he can imagine "cutting interest rates in the near future."

Editor/Emily