Capital Economics: Non-farm payrolls need to fall sharply to prompt the Fed to cut interest rates by 50 basis points

According to Jin10 Data, Olivia Cross of Capital Economics said in a report that non-farm payrolls must show a "significant decline" this week in order for the Federal Reserve to cut interest rates by another 50 basis points next week.

Economists surveyed by The Wall Street Journal expect payrolls to slow to 100,000 in September from 254,000 as a result of the hurricanes and strikes.

Cross said the data would need to be much lower than expected to prompt the Fed to be more dovish. On the other hand, Cross sees upside risks to inflation, which is another reason for the Fed to proceed cautiously.