According to Jinshi Data, Fed Chairman Powell released a clear signal of interest rate cuts at the Jackson Hole meeting, and a rate cut in September is a foregone conclusion. Powell emphasized that the downside risks of employment have increased, the time for policy adjustments has come, and the Fed will do its utmost to support the labor market.
Powell did not express any views on the extent and speed of the rate cut, which leaves room for subsequent operations. The baseline scenario is that the Fed will cut interest rates by 25 basis points in September. If the non-agricultural data is unexpectedly weak again, it may also cut interest rates by 50 basis points.
The market reacted positively to Powell's early announcement of a rate cut because it responded to concerns that the Fed was "behind the curve." Wall Street believes that if the labor market continues to weaken, the Fed will not hesitate to act.
