Source: Glonui.

After the Federal Reserve started the rate cut cycle, global capital markets benefited, with many countries' stock markets hitting new highs.

Next week, the market will usher in two major events, both of which will impact the Fed's monetary policy.

On Monday next week, Fed Chair Powell will give a speech, discussing the economic outlook of the USA.

Next Friday, the usa government will release the non-farm employment data for September.

9月的就业报告预计将显示美国的劳动力市场健康，但有所缓和。

市场预计，美国9月的就业人数预计将增加0.146 million人，与8月的增幅相似，这将使美国三个月平均就业增长接近2019年年中以来的最低水平。

失业率预计保持在4.2%，平均每小时收入预计将比去年同期增长3.8%。

Bloomberg economists expect strong growth in non-farm employment in September, which may even rekindle discussions about the "no landing" of the US economy.

However, Bloomberg believes that the overall data will exaggerate the strength of the labor market, partially due to the exaggeration of the strength of the labor market by the U.S. Bureau of Labor Statistics' model, and partly due to temporary seasonal effects.

In addition to the employment data for September, job vacancy data will also be released next Tuesday, with the current expectation that the data will show vacancies in August approaching the lowest level since early 2021.

Furthermore, the market will also focus on the quit rate and layoff rate to measure the extent of cooling labor demand.

How much will the rate cut be in November?

With the start of the rate cutting cycle, the importance of inflation-related data has decreased for the Federal Reserve, and economic-related data such as employment has become more crucial.

The employment report next Friday will be the last employment data before the Federal Reserve officials' meeting in early November, which will influence the Fed's decision on rate cuts.

In addition, data shows that inflation in the United States is gradually moving towards the Federal Reserve's 2% target.

This Friday, the preferred inflation indicator of the Federal Reserve, August PCE annual rate of decline exceeded expectations, falling to 2.2%.

Currently, there is still a significant divergence in the market on the magnitude of the rate cut in November, with a 53.3% probability of a 50 basis points rate cut and a 46.7% probability of a 25 basis points rate cut.

The market also expects a 100% probability of a rate cut of more than 75 basis points by the Fed this year, which means there will definitely be a large rate cut of 50 basis points at the meetings in November and December.

Officials: Interest rate cuts should be done "gradually".

The latest, St. Louis Fed President Alberto Musalem stated that the Fed should cut interest rates "gradually".

Musalem pointed out: "For me, the most important thing at the current stage is to ease off the brakes, this is to gradually relax restrictions on policies."

Musalem is one of the officials expected to cut interest rates multiple times this year and will become a voting member of the Federal Open Market Committee next year.

He acknowledges that the labor market has cooled off in recent months, but given the low layoff rate and the potential strength of the economy, he remains optimistic about the outlook.

He said that the commercial sector is in a "good state", overall activities are "healthy", and that large-scale layoffs do not seem "imminent."

However, he also acknowledges that the risks facing the Fed may require it to cut rates faster.

Musalem bluntly stated: "I realize that the economy may be weaker than what I currently expect, and the labor market may be weaker than what I currently expect. If that's the case, then accelerating the pace of rate cuts may be appropriate."

Last week, Federal Reserve official Waller also said that if the data weakens more quickly, he would be "more willing to actively cut interest rates".

Editor / jayden