As the Federal Reserve is about to enter the pre-meeting blackout period, the market's focus is on Friday's employment report and its impact on future monetary policy. Fed Chairman Williams and Governor Waller will deliver important speeches, which are seen as the last chance to set expectations for the upcoming meeting. With recent data showing slowing economic growth and inflationary pressures, the market generally expects the Fed to gradually lower the current interest rate of about 5.3% to around 4.5% to adapt to the new economic situation.

However, the magnitude and timing of the rate cut are still full of uncertainty. If the weak employment in July fails to continue into August, some Fed officials may resist a one-time 50 basis point rate cut, fearing that excessive easing may trigger new inflationary pressures. But for those officials who were already open to a rate cut at the July meeting, if the August employment data shows that the unemployment rate has risen again and employment growth continues to slow, they may become more determined to support the proposal of a 50 basis point rate cut in September. At the same time, more officials may also join this position, as signs of weakness in the labor market will provide broader support for a larger policy adjustment.

Ultimately, economic data in the coming weeks will be key to determining the Fed's next move. If the labor market continues to weaken and the risk of an economic slowdown further increases, the Fed may be more inclined to adopt aggressive easing policies to prevent the economy from falling into a deeper recession. On the contrary, if economic data is strong, the pace of rate cuts may be more cautious.