According to a recent report by China International Capital Corporation (CICC), the Federal Reserve is likely to implement a 25 basis point interest rate cut next week, citing recent economic indicators, including weaker-than-expected October nonfarm payroll data. This data reflects temporary disruptions from hurricanes and strikes, which significantly impacted employment, particularly in the leisure, hospitality, and manufacturing sectors. Many employees were unable to work due to adverse weather conditions, and manufacturing jobs saw a decline due to labour strikes.
Despite these setbacks, the report suggests that the U.S. labour market is gradually slowing without drastic declines, with temporary effects expected to reverse in the coming months. Based on this data, CICC forecasts that the Fed will continue easing monetary policy, albeit at a slower pace than previously anticipated by the market. This decision marks a gradual normalization rather than an aggressive rate-cut trajectory, as the central bank evaluates ongoing economic signals.