The intensifying clash between hawks and doves at the Federal Reserve has increased market expectations for a September interest rate cut to over 90 percent.

On Tuesday, several Federal Reserve regional presidents made speeches on different occasions, showing that there are still differences in policy paths under the current economic and inflation situation. Richmond Fed President Barkin said that the uncertainty about the US economic outlook is decreasing, with tax legislation, tariff agreements, and the rise in consumer and business confidence providing clearer signals for the outlook. However, he emphasized that it is still not clear whether the Federal Reserve should focus more on controlling inflation or supporting the job market in the future. "We may face pressure from both inflation and unemployment, but the balance between the two is still unclear," Barkin said at an event in Chicago. He added that the Federal Reserve will maintain sufficient flexibility in policy adjustments and will gather more data before the September 16-17 policy meeting to make a judgment. Barkin pointed out that despite weak nonfarm payroll data in July and significant downward revisions to data from May and June, the labor market is still in a "relatively balanced state of low hiring and low layoffs." However, he also noted that businesses are being more cautious in hiring, especially in cases where skilled positions are still difficult to fill. While Barkin made his remarks, San Francisco Fed President Daly and Minneapolis Fed President Kashkari both hinted that they may support a rate cut in September. Federal Reserve Governors Bowman and Waller advocated for a rate cut at the July meeting, but the Federal Reserve chose to keep rates unchanged at that time. In contrast to the dovish positions above, Kansas City Fed President George is inclined to temporarily hold off on making any changes. He believes that the US economy still has momentum, business sentiment is improving, and inflation remains above the 2% target, so "maintaining a moderately tight monetary policy stance is appropriate." George emphasized that if demand growth significantly slows down, he will adjust his views, but the current moderate growth in demand and cooling labor market help mitigate the transmission pressure of tariffs on prices. The latest data shows that the core CPI in the US rose by 0.3% month-on-month in July, faster than in June, but the impact of tariffs on commodity prices was milder compared to the previous month. Investors believe that the impact of tariffs on inflation is limited, and combined with the slowdown in employment, the likelihood of a rate cut by the Federal Reserve in September is high. The CME's "FedWatch" tool shows that the market expects a 25 basis point rate cut in September with a probability exceeding 90%.