CICC: The Federal Reserve's 25BP rate cut in September is still the baseline scenario
The research report from China International Capital Corporation indicates that the decline in U.S. unemployment rate in August reflects a reversal of temporary unemployment, which is consistent with our expectations. However, the slowdown in new non-farm employment suggests that businesses are also reducing their demand for labor. The good news is that there are no signs of significant layoffs by companies and the number of people applying for unemployment benefits remains low. This means that the labor market is still stable and has not "fallen off a cliff". Looking ahead, it's expected that the U.S economy will achieve a soft landing, but action must be taken by Federal Reserve as well. We believe there's a greater possibility for Fed to cut interest rates by 25 basis points in September and may increase cuts depending on circumstances afterwards.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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