The probability of the Fed holding the interest rate in July was 76.7%, and the chance of a 25 basis point cut was 23.3%.

U.S. economic data such as non-farm payroll and small employment did not meet expectations and have impacted the Fed's monetary policy forecast for 2024.

MAIN CONTENT

  • In July, the Fed had a 76.7% chance of holding the interest rate steady, and a 23.3% chance of a 25 basis point cut.

  • In September, the probability of a total 25 basis point rate cut is 73.3%.

  • U.S. non-farm payroll data and small employment came in with negative surprises, affecting Fed policy.

What is the likelihood of the Fed maintaining the interest rate in July?

Based on CME 'Fed Watch' data from July 3, 2024, the probability of the Fed holding rates steady in July was 76.7%, while the likelihood of a 25 basis point cut was around 23.3%. This forecast is built on market analysis and the latest economic developments.

This information reflects the Fed's caution in the face of gradually decreasing inflationary pressures and uncertainties in global economic growth. According to the Chairman of the Chicago Economic Council – Mr. David Rosenberg (2024), 'The Fed is carefully considering to avoid triggering an unexpected economic recession.'

What is the probability of a rate cut in total in September?

CME's 'Fed Watch' indicated that in September, the probability of the Fed cutting rates by a total of 25 basis points is 73.3%, while the probability of a 50 basis point cut is 21.8%. Conversely, the risk of maintaining the interest rate is only 4.9%. This signals that the Fed may implement a monetary easing policy to support growth.

U.S. non-farm payroll data is expected to play a crucial role in this decision. Economist Lydia Boussour from Oxford Economics assesses (2024) that 'weak employment figures will prompt the Fed to cut rates in the third quarter of this year.'

Why has recent U.S. employment data had a significant impact on Fed forecasts?

On July 3, 2024, the U.S. non-farm payroll index showed an unexpected negative value. Additionally, the small employment data also indicated a declining trend. This data helps the market adjust expectations for the Fed's monetary policy in the near future.

Employment is considered a leading indicator of the economic health of the United States, directly influencing interest rate decisions to balance between controlling inflation and maintaining growth. At the Jackson Hole conference in 2023, Fed Chairman Jerome Powell emphasized the importance of accurate and timely employment reports in policy planning.

In the context of fluctuating economic data, the Fed will prioritize flexible measures to stabilize the market without harming long-term growth.
– Jerome Powell, Fed Chairman, August 2023

How do non-farm payroll data and small employment affect the financial markets?

The decline in non-farm payroll and small employment puts pressure on the financial markets by reducing investor confidence and expectations for economic growth. Stock indices and cryptocurrency markets tend to react sensitively to these reports.

In 2024, weaker-than-expected economic data has pulled back many major stock indices such as the S&P 500, Nasdaq, while also putting downward pressure on popular Tokens in the cryptocurrency market.

Compare the probabilities of the Fed's interest rate in July and September.

Month Hold Interest Rate (%) Cut 25 Basis Points (%) Cut 50 Basis Points (%) July 76.7 23.3 – September 4.9 73.3 21.8

Frequently Asked Questions

What policy will the Fed prioritize in the coming months? Experts believe the Fed will maintain a cautious policy, focusing on adjusting interest rates based on actual economic data and inflation, to avoid negatively impacting long-term growth. How does U.S. employment data affect the cryptocurrency market? Weak employment data may lead to a decline in Token prices due to reduced expectations for economic growth and liquidity in global financial markets. How will changes in Fed interest rate policy affect individual investors? Investors need to closely monitor Fed movements to adjust their portfolios, especially in high-volatility assets such as cryptocurrencies and stocks. When will the next non-farm payroll data be released? U.S. authorities release non-farm payroll data at the beginning of each month, which is a key basis for the Fed to evaluate and forecast policy. What do negative values in small employment data indicate? This reflects a slowdown or decline in employment within small businesses, warning of the risk of reduced purchasing power and its impact on the overall economy.

Source: https://tintucbitcoin.com/fed-co-the-ha-lai-suat-thang-9/

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