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Markets Call Powell’s Bluff: Weak Jobs Data Shatter Confidence in the Fed
Confidence in Federal Reserve Chair Jerome Powell has taken a serious hit. Just one disappointing U.S. employment report was enough to dismantle the illusion of a “resilient labor market” that Powell had defended earlier this week. Markets reacted immediately, and a September interest rate cut is once again on the table — now with a much higher probability than before.
According to the newly released data, the U.S. economy added just 73,000 nonfarm payroll jobs in July. That’s far below the 110,000 expected by analysts. What’s more, there were massive revisions to previous months’ figures. June’s number was slashed from 147,000 to only 14,000. May’s data dropped from 144,000 to 19,000. In total, 258,000 jobs disappeared from the last two months' statistics — roughly equivalent to the entire population of Scottsdale, Arizona.
Meanwhile, the unemployment rate quietly rose to 4.2%. Although that matched expectations, it was still higher than the previous month, putting a serious dent in the narrative that the Fed had pushed just days ago. Powell’s statement that the labor market was “still strong” didn’t even survive a full media cycle before being discredited by the cold reality of the numbers.
Markets Flip: Rate Cut Seen as a Done Deal
The market’s response was swift. The CME FedWatch Tool showed that the probability of a rate cut in September jumped to 75.5%, up from just 40% a day earlier. Prediction platform Kalshi echoed this sentiment, giving a 75% chance that Powell and his team will lower interest rates at the next FOMC meeting.
The bond market also responded sharply. The two-year U.S. Treasury yield dropped by 15 basis points to 3.80%, while the ten-year yield fell by 8 basis points. For many investors, the message was clear — a policy pivot is rapidly approaching.
Trump Blasts Powell: “Too Late. Cut Rates Now!”
As expected, Donald Trump wasted no time in attacking the Fed Chair. On his Truth Social platform, he called Powell “a disaster” and demanded an immediate rate cut.
“Too little, too late. Jerome ‘Too Late’ Powell is a disaster. CUT RATES! The good news is, tariffs are bringing billions into the USA!”
So what do today’s numbers really mean? At this point, there are only two plausible interpretations. Either the U.S. labor market is genuinely sliding into recession, or the Bureau of Labor Statistics data is so flawed that a quarter of a million jobs have simply vanished in two months. Neither scenario is encouraging. The first suggests real economic trouble. The second suggests that nobody actually knows what’s going on in the economy.
In either case, a September rate cut is no longer a “maybe.” The market is now pricing it in as almost certain.
#Powell , #Fed , #WallStreet , #FederalReserve , #TRUMP
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Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“
According to the newly released data, the U.S. economy added just 73,000 nonfarm payroll jobs in July. That’s far below the 110,000 expected by analysts. What’s more, there were massive revisions to previous months’ figures. June’s number was slashed from 147,000 to only 14,000. May’s data dropped from 144,000 to 19,000. In total, 258,000 jobs disappeared from the last two months' statistics — roughly equivalent to the entire population of Scottsdale, Arizona.
Meanwhile, the unemployment rate quietly rose to 4.2%. Although that matched expectations, it was still higher than the previous month, putting a serious dent in the narrative that the Fed had pushed just days ago. Powell’s statement that the labor market was “still strong” didn’t even survive a full media cycle before being discredited by the cold reality of the numbers.
Markets Flip: Rate Cut Seen as a Done Deal
The market’s response was swift. The CME FedWatch Tool showed that the probability of a rate cut in September jumped to 75.5%, up from just 40% a day earlier. Prediction platform Kalshi echoed this sentiment, giving a 75% chance that Powell and his team will lower interest rates at the next FOMC meeting.
The bond market also responded sharply. The two-year U.S. Treasury yield dropped by 15 basis points to 3.80%, while the ten-year yield fell by 8 basis points. For many investors, the message was clear — a policy pivot is rapidly approaching.
Trump Blasts Powell: “Too Late. Cut Rates Now!”
As expected, Donald Trump wasted no time in attacking the Fed Chair. On his Truth Social platform, he called Powell “a disaster” and demanded an immediate rate cut.
“Too little, too late. Jerome ‘Too Late’ Powell is a disaster. CUT RATES! The good news is, tariffs are bringing billions into the USA!”
So what do today’s numbers really mean? At this point, there are only two plausible interpretations. Either the U.S. labor market is genuinely sliding into recession, or the Bureau of Labor Statistics data is so flawed that a quarter of a million jobs have simply vanished in two months. Neither scenario is encouraging. The first suggests real economic trouble. The second suggests that nobody actually knows what’s going on in the economy.
In either case, a September rate cut is no longer a “maybe.” The market is now pricing it in as almost certain.
#Powell , #Fed , #WallStreet , #FederalReserve , #TRUMP
Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“
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