Fed officials: September rate cut of 50 basis points lacks support as economic growth slows and there are divergences regarding inflation.

On August 14, Fed's Musalem stated that it is too early to decide whether to cut interest rates at next month's meeting. When asked if there is a reason to cut by 50 basis points next month, Musalem said that from his perspective, this would "not be supported by the current economic conditions and outlook." Musalem noted that on one hand, "the data is beginning to give us some indications of whether there is a possibility of sustained inflation."

At the same time, he mentioned the "downside risks to the labor market." Moussailem stated that the slowdown in U.S. economic growth, coupled with tariffs putting pressure on corporate profit margins, could threaten the labor market, which has performed well so far. He said, "I am weighing these two factors, and when we see tension between the two goals, a balanced strategy is needed."