The Fed is ready to cut interest rates ahead of schedule. The real reason is that the US labor market is deteriorating.

Current swap market data shows that traders have brought forward the Fed's expectations for the first 25 basis point cut from December to November. The reason why the market is pricing the Fed's "eagerness" to cut interest rates is that the US labor market is deteriorating, not due to the decline in inflation.

Even Fed Chairman Powell himself agrees with this view. After the FOMC resolution on May 1, when asked what factors might cause officials to cut interest rates ahead of schedule, Powell mentioned the "unexpected" deterioration of the labor market.

Before the election, Biden will also promote interest rate cuts this year to please voters, which will release a lot of liquidity. Everyone should choose a good target and sit tight. #降息