The unemployment rate rises to 4.4%. Will the Fed start a 50 basis point rate cut? RBC's warning is here!
Michael Reid, an economist at RBC Capital Markets, recently warned: If the US unemployment rate rises to 4.4%, the Fed may choose to cut interest rates by 50 basis points. If the unemployment rate falls instead and employment growth remains above 100,000, the pace of rate cuts may slow down. Especially with the election approaching, every step of the Fed's rate cut may be magnified and interpreted as "favoring the ruling party", making decision-making more cautious.
At present, the futures market generally expects the Fed to cut interest rates by 25 basis points this month, and the cumulative rate cut this year is expected to reach 1 percentage point. There will be several more 25 basis point rate cuts in 2025, but there are still many variables in the future policy direction.
Lao Lin's interpretation:
The rate cut window has been opened, and market opportunities and challenges coexist. The rise or fall in the unemployment rate will directly affect the Fed's pace of rate cuts. Keep up with market dynamics and investors need to flexibly adjust their positions. For those who are looking forward to a larger interest rate cut, Lao Lin reminds: the opportunity may come earlier, be prepared!
Follow Lao Lin: Opportunities always appear inadvertently. Follow Lao Lin and accurately grasp the pulse of the market, so that you can move forward steadily in the turbulent financial market!
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