William Lee: Powell building case for 50 bps Fed rate cut soon

• Economist William Lee suggests Fed Chair Powell is implicitly advocating for larger, sooner rate cuts, possibly 50 basis points, despite recent cuts.
• Lee notes Powell is balancing strong GDP growth (4%) with a rapidly weakening labor market, including negative employment growth.
• According to Lee, Powell believes current inflation is temporarily boosted by tariffs and decreasing service sector inflation.
• Lee interprets Powell's "high side of normal" policy rate comment as a signal for moving to the "low side of normal" due to labor market weakness.
• Lee concludes that downside risks to the labor market are greater than upside risks to inflation, suggesting Powell aims for pre-emptive action amid data uncertainty.

Why It Matters: Potential for larger, sooner Fed rate cuts could impact your finances.