After the release of the U.S. July employment report, the financial markets experienced significant fluctuations. Despite the weak performance of the data, Fed officials remain cautious. New York Fed President Williams stated in an interview that he would approach the September meeting with an "open mind." However, he also provided a more cautious assessment, seemingly intent on downplaying market expectations for a more accommodative monetary policy.

Williams emphasized that the labor market has shown a moderate and gradual cooling trend over the past year, but overall remains robust. As a key ally of Fed Chairman Powell, Williams' remarks have drawn widespread attention from the market.

It is worth noting that there were differences among Fed officials in last week's interest rate decision. Although the final decision was to keep the rates unchanged, two officials voted in favor of a rate cut. Even among those who supported maintaining the status quo, there were different concerns: some were more focused on the labor market, while others were worried about potential inflation rising in the coming months. This divergence poses a challenge for Powell in building consensus.

Despite a slight increase in the unemployment rate to 4.2% in July, the overall weakness in employment data provides some room for Powell to build consensus for interest rate cuts. This data somewhat undermines the narrative of a persistently strong labor market. Before the next meeting, Fed officials will also have the opportunity to review a month's worth of employment data.

Williams particularly pointed out that the significant downward revision of the employment data for May and June is the key information in this report. This data revision reflects that the job market may be weaker than previously expected. However, Fed officials still seem inclined to proceed with caution and are reluctant to easily change the current monetary policy stance.

Overall, despite signs of weakness in the employment data, Fed officials still maintain a relatively hawkish stance, believing that the labor market remains robust overall. This attitude suggests that the aggressive rate cuts anticipated by the market may not arrive soon. Economic data in the coming months will be a key factor in determining the direction of Fed policy.