U.S. economic policymakers have significant differences regarding the issue of interest rate cuts. Treasury Secretary Scott Basset has called for the Federal Reserve to make a substantial rate cut of 50 basis points in September and to lower the interest rate more than 1.5 percentage points below the current level in the future. Meanwhile, Trump has demanded that the interest rate be cut to nearly 1%. However, achieving such an aggressive interest rate cut goal faces numerous challenges.

First of all, the labor market needs to show significant signs of deterioration. Secondly, there are irreconcilable differences in policy orientation between Federal Reserve Chairman Powell and the government. Although the overall CPI data for July is relatively mild, providing some justification for interest rate cuts, core inflation has reached the largest monthly increase since the beginning of the year due to intensified inflation in the service sector, raising market concerns about whether inflation is forming a new trend, which may limit the Federal Reserve's ability to cut interest rates.

There are also clear divisions within the Federal Reserve regarding interest rate policy. Some officials support rate cuts, while others take a cautious stance due to concerns about inflation. The core of the disagreement lies in how to assess the impact of trade tariffs on inflation and the labor market.

If inflation in the service sector remains high, the Federal Reserve may raise the threshold for rate cuts or limit the extent of rate cuts. The Federal Reserve may need to see a weaker employment report and a more moderate inflation outlook before considering further rate cuts. However, influenced by immigration restriction policies, the definition of "weak labor market" may change. Slower job growth may reflect a decrease in labor supply rather than a decline in demand, making indicators such as the unemployment rate more important.

Some opinions suggest that the current economy is not in a recession and the labor market is undergoing structural changes. In this context, a rate cut may actually trigger more inflationary pressure. Therefore, the Federal Reserve needs to weigh multiple factors and proceed with caution when formulating its interest rate policy.