美联储“三把手”威廉姆斯在数据发布后表示：Source: Wall Street See
It's almost certain that interest rates will be cut this month, but there is still controversy over how much the cut will be. The market's expectation for the Fed to cut rates by 50 basis points this month has increased.
In August, the US labor market remained weak, and employment fell short of expectations. On September 6th, the US Bureau of Labor Statistics released a report showing that the non-farm employment population in the US increased by 0.142 million people in August, which was lower than the expected 0.165 million people. The data for July was significantly revised from 0.114 million to 0.089 million people.
William, one of the top three officials at the Federal Reserve, stated after the data was released:
The Federal Reserve has made significant progress in maintaining price stability and achieving maximum employment, and the risks to these two goals are now in a balanced state. The inflation rate is gradually moving towards the 2% target, so it is appropriate to lower the federal funds rate now.
Traders predict that the probability of a 50 basis point rate cut by the Fed this month has risen from 36% before the data release to about 50% currently. At the same time, the market predicts a total rate cut of about 115 basis points for the full year of 2024, higher than the previous forecast of 108 basis points.
It is worth noting that Williams did not express any intention to cut rates by 50 basis points this month. Nick Timiraos from the "New Fed Communications Agency" said:
The prepared speech by Fed official Williams did not lay any groundwork for a 50 basis point rate cut. Over time, policy can shift towards a more neutral setting. He is now in the Q&A session, and if the person asking the question decides to ask about monetary policy instead of bond management, we may get more information.
"Fed megaphone" Nick Timiraos said:
The non-farm payrolls report may provide a clear signal about the first interest rate cut by the Fed, whether it's 25 basis points or 50 basis points, the market pricing will immediately rise to 90%. But this non-farm payrolls report did not address the issue well. Currently, the market pricing for a 25 or 50 basis point rate cut is 'half-open'. Overall, the non-farm data has not deteriorated enough to shift the benchmark expectation to a 50 basis point rate cut, but considering the revised data, it is not convincing enough to completely dispel speculation about a larger rate cut.
Editor / jayden
