According to BlockBeats, on September 6, Nick Timiraos, the “Fed Mouthpiece”, published an article when the August non-farm data was about to be released, saying that tonight’s employment report will affect the extent of the Fed’s interest rate cuts. If the August non-farm is another bad employment report, it may lead to a sharp 50 basis point rate cut by the Fed, but if the employment situation is good, it will keep the Fed on track to cut interest rates by 25 basis points. At the Fed’s September 17-18 meeting, the focus of the debate was whether to start with a more traditional 25 basis point rate cut or a larger 50 basis point rate cut to prevent an undesirable weakness in the job market.
The August hiring and employment report, due to be released tonight, will be key to any decision on a rate cut. A decent employment report could prompt officials to kick off a possible series of rate cuts with a 25 basis point cut. Friday also happens to be the last day that Fed officials can communicate publicly before the self-imposed pre-meeting blackout period begins. New York Fed President John Williams and Fed Governor Michael Waller are scheduled to speak after the jobs report, the last chance to set expectations for the upcoming meeting.
Diane Swonk, chief economist at KPMG, said: “There is a very strong case for a 50 basis point rate cut. The labor market is not in recession, but it is on thin ice. Even with good data on Friday, the slack in the labor market is increasing.” (Jinshi)
