The market rebounds, and expectations for interest rate cuts continue to strengthen. Last night, Goldman Sachs' macro team directly stated that a 50 basis point rate cut in September has become the baseline scenario, and the current market is still underestimating this possibility. Last night, three Federal Reserve officials began to anticipate a rate cut in September, all of whom clearly supported maintaining the current stance at the last FOMC meeting. It seems that this non-farm payroll report has completely shifted the Fed's stance.

I estimate that Bowman and Waller will soon publicly support a 50 basis point rate cut. Currently, the CME's expectation for a 25 basis point rate cut in September has increased to over 93% compared to the day before yesterday, meaning that a 25 basis point cut is basically fully priced in now. If a 50 basis point cut occurs, then the bullish trend for rate cuts may commence earlier. Additionally, news last night indicated that Trump plans to appoint a new Federal Reserve Chair ahead of schedule, with four candidates already locked in. The top two are Kevin Warsh at a 30% probability and Hassett at 26%, while the other two are Malpass and Waller. Among them, Hassett and Malpass are relatively more dovish; if either of these two becomes a new Federal Reserve governor, it would be a significant positive for the market, and this will likely happen in the next couple of days.