Recently, the topic of whether the Fed will cut interest rates in September has sparked renewed debate. Let's analyze this complex issue from multiple perspectives.

First, from the perspective of the independence of monetary policy, although the Fed is not completely independent, its primary responsibility is to maintain the stability of the value of the US dollar. Currently, except for Japan, other major economies are cutting interest rates, and the interest rate differential between the eurozone and the US dollar has reached 200 basis points, which provides some external pressure for the Fed to cut interest rates.

From a market perspective, as long as the inflation rate (CPI) remains below 3% and the real interest rate is maintained between 1% and 2%, the Fed theoretically has room to cut interest rates. However, policy factors cannot be overlooked, including tariff policies and fiscal stimulus measures. Despite the increase in tariff revenues, the pace of debt accumulation has not slowed down, and market enthusiasm has actually intensified under the stimulus policies.

Recently, the United States reached framework agreements with several major economies, and tariffs are expected to be reduced in the short term, which may alleviate supply shocks. This creates a favorable political environment for interest rate cuts. If the CPI data for July and August remains stable or below expectations, the likelihood of rate cuts will significantly increase.

The market has shown support for interest rate cuts, and the policy environment also provides space. In fact, the decision-making power is largely in the hands of policymakers. If agreements can be reached quickly with major economies to reduce policy uncertainty, the Fed may take interest rate cut actions that exceed expectations.

The latest released CPI data for July and PPI data for September further enhance the possibility of interest rate cuts. In particular, the PPI data for September exceeded expectations significantly, making a 25 basis point rate cut in September almost a certainty.

Overall, economic data, policy environment, and market trends are all creating conditions for a rate cut in September. However, we still need to closely monitor potential policy changes and fluctuations in economic indicators in order to more accurately predict the Fed's decisions.