According to BlockBeats, influenced by the shocking U.S. non-farm employment data, expectations for a Fed rate cut have warmed. Despite the market's expectation that the Fed will further cut rates, the dollar has unexpectedly remained strong, even not experiencing a significant drop after the disappointing non-farm employment data. Several Fed watchers stated that these U.S. non-farm employment data have locked in a rate cut this month. Investors share the same view, raising the probability of a rate cut at this month's meeting to 99%.
Events worth noting in the coming week include: Monday, U.S. August New York Fed 1-year inflation expectations. Tuesday, U.S. preliminary change in non-farm employment benchmark for 2025. Wednesday, U.S. August PPI data; U.S. July wholesale sales month-on-month. Thursday, U.S. August CPI data, U.S. initial jobless claims for the week ending September 6. Friday, U.S. September one-year inflation rate expectations preliminary value, September University of Michigan consumer confidence index preliminary value.
If the PPI in August shows another unexpected increase, investors may scale back some of their more dovish expectations for a rate cut by the Fed. However, for now, the impact of tariffs on commodity prices seems mild, and a potentially bigger headache for the Fed is the recent rebound in service sector inflation. According to the Cleveland Fed's real-time forecasting model, the overall CPI year-on-year for August is expected to rise slightly by 0.1 percentage points to 2.8%, while the core CPI year-on-year may remain unchanged at 3.1%.