Global attention is focused on the Jackson Hole Economic Symposium. Fed Chair Powell will deliver a keynote speech at 10 PM Beijing Time on Friday. This summer's "annual blockbuster" in the financial markets is seen as a critical moment for the future direction of the Fed's monetary policy. According to LSEG data, traders' bets on a 25 basis point Fed rate cut in September have plummeted from 99.9% last week to 79%. Market participants noted that August trading is already thin, and Powell's speech could trigger significant volatility.

On Thursday, data released by S&P Global showed that driven by stronger demand, the US manufacturing PMI expanded at its fastest pace in over three years. The rebound in manufacturing also pushed the composite PMI (including services) to its highest level this year in August. It also intensified persistent inflationary pressures—firms' pricing power increased, allowing them to pass on the rising costs from tariffs to customers more frequently.

Also on Thursday, policymakers including Cleveland Fed President Mester, Atlanta Fed President Bostic, and Kansas City Fed President Schmid all sent cautious signals, emphasizing that monetary policy must be data-dependent and that there is no rush to cut rates.

Cleveland Fed President Loretta Mester said on Thursday that if Fed officials had to make a policy decision tomorrow, she would not support a rate cut in September.

Mester stated in a media interview: "Inflation is still too high and has been moving up over the last year. Based on the information I have today, if we were having the meeting tomorrow, I don't see a case for cutting interest rates."

She acknowledged some concerns in the labor market but also pointed out that the unemployment rate remains near what she considers "full employment" levels.

Earlier on Thursday, Atlanta Fed President Raphael Bostic said he still believes the Fed can cut rates once this year, but also noted that against the backdrop of an economy undergoing profound changes, this judgment is highly uncertain.

Bostic views the current federal funds target rate range (4.25% - 4.5%) as "slightly restrictive." He mentioned an intense debate within the Fed about the need for rate cuts. He expects US economic growth this year to be "relatively modest," with a potential rebound next year once the business community has a clearer view of the direction of US economic policy.

Kansas City Fed President Jeffrey Schmid said he sees inflation risks as slightly higher than labor market risks, but that current monetary policy is in a good place as policymakers consider whether to adjust rates next month. Schmid said on Thursday: "As you get closer to the optimum dual mandate goals, it actually gets harder to decide on the margin where the policy rate should go." He said the current debate on when to cut rates boils down to whether individual policymakers think policy is too restrictive. He stated: "I think policy is slightly restrictive, but I think we're on the right path."

Additionally, the Fed's Collins (Note: Likely Susan Collins, Boston Fed President) said that if the labor market outlook deteriorates, a rate cut might be appropriate in the near term; the Fed cannot wait until inflation is completely clear before considering rate cuts; she expects inflation to continue rising until the end of the year before resuming its earlier downward trend in 2026.

According to CME's "FedWatch Tool": the probability of the Fed holding rates steady in September is 25%, while the probability of a 25 basis point cut is 75%. The probability of the Fed holding rates steady in October is 13.3%, the cumulative probability of a 25 basis point cut is 51.5%, and the cumulative probability of a 50 basis point cut is 35.3%.