Chicago Fed President: Inflation path remains uncertain, September rate cut needs more data support.

Federal Reserve Chairman Gurlesby of Chicago said that he hopes to see at least one more inflation data before being convinced that sustained inflationary pressures are no longer heating up. In an interview on Friday, Gurlesby said that recent inflation data has been "somewhat uneven," and he believes that "at least one more data point is needed to judge whether we are still on the 'golden path.'" He reiterated his earlier views this week that he is concerned about the high services sector inflation shown in the July Consumer Price Index (CPI), but emphasized that one should not overreact to monthly data, including the import price increase data released on Friday. So far this year, Federal Reserve officials have maintained interest rates unchanged to observe the impact of tariffs and other policy changes on the US economy. According to the pricing of interest rate futures markets, investors generally bet that the Fed will restart rate cuts at the September meeting. Gurlesby emphasized the need to wait for more economic data to be released, pointing out that the US economy still has a lot of resilience. "We will have to judge which price increases are temporary and can be ignored, and which ones need to be responded to," Gurlesby said. "If two out of the next four inflation reports are like the first two this month, I will be very confident that inflationary pressures have gradually dissipated." Before his remarks, the latest data from the US Department of Commerce showed that US retail sales grew by 0.5% month-on-month in July, higher than market expectations, and June data was also revised upward to 0.9%. Excluding automobiles, retail sales increased by 0.3%. Meanwhile, US industrial output fell by 0.1% month-on-month in July, with manufacturing output, accounting for three-quarters, remaining unchanged after being revised upward in June, while mining and utilities output both declined. The manufacturing sector had received a large number of orders at the beginning of the year before tariffs were introduced, but since then, production has weakened due to cooling demand, slowing capital expenditure, and uncertainty in trade policies. Manufacturers also face challenges such as uneven consumer spending and increased prices of some raw materials due to tariffs. In terms of trade policy, US President Trump said on Friday while on his way to meet Russian President Putin in Alaska that he will impose tariffs on semiconductors in the next two weeks, the latest sign of his expansion of the tariff system. He said, "I will set tariffs on steel and chips next week and the week after... The rate could be 200% or 300%." It is not clear whether he misspoke when referring to steel tariffs. In June of this year, the US raised import tariffs on steel and aluminum to 50%. In addition, Trump has also repeatedly stated plans to impose tariffs on imported drugs and semiconductors, but has not officially announced them.