Everyone is paying attention to the interest rate cut. Will it really be cut?

The extent of the Fed's interest rate cut depends on the performance of tonight's data:

If the data is weak, the Fed may cut interest rates by 50 basis points; if the data is good, the Fed is likely to maintain a 25 basis point interest rate cut.

How to define the "weakness" of the data is the key:

The market expects non-farm payrolls to increase by 160,000 in August and the unemployment rate to drop to 4.2%. Wall Street will judge the quality of the data based on whether the non-farm payrolls and unemployment rate meet expectations. It is rare to meet both expectations at the same time. Usually, if one indicator is good, the other will be biased.

The conditions for the extent of the interest rate cut:

25 basis point interest rate cut: slightly lower than expected or flat. Unemployment rate 4.2%-4.3%, 130,000-150,000 new jobs. 50 basis point interest rate cut: unemployment rate above 4.3%, or non-farm payrolls below 110,000.

Chicago Fed Chairman Goolsbee's views:

He believes that there are signs of cooling in the labor market and it may deteriorate further. Although the Fed will not rely too much on a single data, the August employment data will provide an important reference for determining the scale of interest rate cuts.

The Fed enters the silent period before the policy meeting:

After the employment data is released, New York Fed President Williams and Fed Governor Waller will give speeches. This is the last chance for the Fed to send policy signals.

In the end, although tonight's non-farm employment data is important, market fluctuations are inevitable. The results of the non-farm data will directly affect the extent of the Fed's interest rate cut in September.