According to BlockBeats, on August 14, traders are divided on whether the Federal Reserve will cut interest rates by 25 or 50 basis points in September. Swap trading indicates that the market expects a 36 basis point cut by the Fed in September. Overall, they anticipate the Fed will reduce rates by about 1 percentage point for the remainder of 2024.

Deutsche Bank's Chief U.S. Economist Matthew Luzzetti stated, 'Frankly, I think both sides have strong arguments,' referring to the debate over a 25 or 50 basis point cut. 'Their rates are restrictive, and inflation data suggests there isn't much upward inflation risk. It then depends on whether the economy is as resilient as we think.' On Tuesday, Atlanta Fed President Bostic mentioned he wants to see 'more data' before supporting a rate cut, emphasizing the need to ensure the Fed doesn't have to reverse course after starting rate cuts.

Following weak U.S. employment data earlier this month, the bond market has clearly surpassed the Fed's prediction of a 50 basis point cut this year. Market participants will closely watch Fed Chair Powell's speech at the annual central bank symposium in Jackson Hole later this month, as well as the next U.S. non-farm payroll report in early September. Gregory Faranello, Head of U.S. Rates Trading and Strategy at AmeriVet Securities, commented, 'If inflation data is favorable, the Fed will cut rates by 25 basis points in September. However, if the unemployment rate rises again and the next non-farm payroll report weakens further, it could distort market pricing for the Fed's rate cuts.'