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The Fed's dovish shift is due to economic trends, reigniting market expectations for a rate cut in September.
According to reports, Mona Mahajan of Edward Jones stated that Fed Chair Powell's dovish turn at Jackson Hole is based on economic trends rather than political pressure. She pointed out that Powell's position has been quite consistent, and the market recognizes that he has provided a balanced narrative, with no signs indicating that his stance has changed due to political factors. At the same time, Powell mentioned that tariff-driven inflation may be temporary and acknowledged cracks in the labor market, which reignited the market's bets on a rate cut in September.