Industrial Securities: The market expects the Fed to cut interest rates by 100-125bp in three meetings this year

Industrial Securities released a review of the US July non-farm payrolls. The team believes that the conditions for rate cuts are met, and the fermentation of downside risks in the job market has raised market expectations for rate cuts. The market has upgraded from trading economic cooling to trading recession, but the observation of the possibility of recession has not ended, so be wary of overdraft trading. After the data was released, stocks fell and bonds rose. The expected probability of a single 50 basis point rate cut in September exceeded 70%. The market expects a total rate cut of 100-125bp in three meetings this year, and major asset classes show recession trading characteristics. However, the observation of the possibility of recession has not ended, and the current amount of data is not enough to judge whether the economy will really fall into recession. The July CPI, August non-farm payrolls, and August CPI before the September meeting will further confirm whether the risk of recession will escalate and whether the preventive rate cut will be successful, so as to judge whether there will be a "big step" rate cut in the future. (Jinshi) $ETH