Is the Federal Reserve ready to go large? Analysts discuss lowering the prices of boundaries after soft job data

After Displayed functional reportSome economists say that the Federal Reserve may now have to move more strongly in its meeting in September, with a 50-Basis reduction on the table.

August A. Shock in JulyThe last report showed that the growth of salaries stopped, and the unemployment climbed to its highest level in nearly four years, and months of descending reviews.

Non-agricultural salary lists rose by only 22,000 in the past month, as 75,000 expectations were fired. Reviews are also erased from the early summer, leaving in June as the first month of explicit job losses since 2020. The average salary growth slowed for three months to only 29,000, which confirmed the so-called Lydia Boussor from Ey-Parthenon “in the main corner in Economy-Labor. ” The unemployment rate also reached 4.3 %, which is the highest level since October 2021.

Analyst Jimmy Cox of the Harris Financial Group wrote in a note: “A section of 50-Basis-Point has now been run,” Writer Jimmy Cox of Harris Financial Group wrote in a note. “The free Federal Reserve pass it to the labor market.”

Kevin Haysit, director of the current White House of Economic Council and Summit rival To be nominated as head of the Federal Reserve lectures, he said he expected the federal reserve to reduce the prices of Jumbo.

“The main market expectation is 25 basis points. But I think there will be an expectation, a discussion of higher reduction, but I don’t expect it to happen,” the White House reporters told reporters.

Others were more careful.

“I don’t see the current results as soft enough to justify 50,” wrote Larry Wrathir, the chief American economist in Daoa Capital Markets.

“One will recently hear about the 50 Basis reduction, which we believe is premature. It will take a big surprise in the product price index and the consumer price index to happen.”

However, James Knightley said, “Some investors are wondering whether the Federal Reserve can reduce 50 -bit in September … We can see two or three members (FOMC) vote by 50 bits per hour.”

Currently, most economists in Wall Street expect the Federal Reserve to reduce a quarter point on September 17, followed by additional moves in December until 2026. But markets are increasingly pricing with the opportunity to “reduce insurance” to stop what looks like the emerging shrinkage.

Futures With the price of the standard at the Federal Reserve, the possibilities of half a point reduced by 11.7 % after job data, up from 0 % on Thursday.

Meanwhile, the return on the cabinet for 10 years decreased by 9.2 % to 4.084 % on expectations to reduce more aggressive.

Symbolism of the emergency pieces

A greater step will carry a heavy symbolism: it can reach the extent of recognition of President Jerome Powell’s feeding, who Spent The best part of last year warns of cutting very quickly, may have been waiting for a long time. President Donald Trump was already knocking on this message, accusing Powell that “”The master is too late“Tightening monetary policy to a knot. Jumbo’s piece can be read in September as a verification of this late criticism.

However, the Federal Reserve is trapped through competing pressure, that is, its double mandate for price stability and the maximum employment. Definitions have maintained more inflation than expected, and some federal reserve officials Worry The very deep reduction risk the price pressures, just as families may face higher costs in Grocery store or mall.

“It is a tight rope,” Prussuelas said. “The labor market is deteriorating, but inflation has not yet returned to the goal. The function of the Federal Reserve is getting more difficult, not easier.”

The result may depend on the standard reviews next week for salary statements, which may show hundreds of thousands of jobs created during the past year, which was previously reported. If the labor market proves weaker than the official data already indicates, the issue of reducing half a bolder point in September will grow higher.

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