According to BlockBeats, the financial markets are experiencing significant fluctuations this week, influenced by unexpectedly weak U.S. non-farm employment data, which has heightened expectations for a Federal Reserve rate cut. Despite market predictions of further rate cuts by the Federal Reserve, the U.S. dollar has remained unexpectedly strong, even after the disappointing employment figures.
Several Federal Reserve analysts have indicated that the recent non-farm employment data has solidified the likelihood of a rate cut this month. Investors share this sentiment, with the probability of a rate cut at this month's meeting rising to 99%.
Key economic data releases this week include the New York Fed's one-year inflation expectation on Monday at 23:00 UTC+8, the preliminary change in non-farm employment benchmarks for 2025 on Tuesday at 22:00 UTC+8, August's Producer Price Index (PPI) data on Wednesday at 20:30 UTC+8, and July's wholesale sales monthly rate on Wednesday at 22:00 UTC+8. Additionally, August's Consumer Price Index (CPI) data and initial jobless claims for the week ending September 6 will be released on Thursday at 20:30 UTC+8, followed by September's preliminary one-year inflation rate expectation and the University of Michigan's consumer sentiment index on Friday at 22:00 UTC+8.
If August's PPI shows another unexpected increase, investors might temper some of their more dovish expectations for a Federal Reserve rate cut. However, for now, the impact of tariffs on goods prices appears moderate. A potentially larger concern for the Federal Reserve is the recent resurgence in service sector inflation. According to the Cleveland Fed's real-time prediction model, the overall CPI annual rate for August is expected to rise slightly by 0.1 percentage points to 2.8%, while the core CPI annual rate is likely to remain unchanged at 3.1%.
