The market currently has a strong expectation that the Federal Reserve will initiate interest rate cuts in September, with a probability as high as 90.7%. I see that this probability is based on a consensus regarding economic slowdown, such as a cooling labor market and improving inflation. However, we should also recognize that the market's expectations for subsequent policy paths appear overly aggressive. For example, the probability of maintaining interest rates in October is only 4.5%, almost certain that rate cuts will unfold coherently. I believe this high level of certainty carries risks. The Federal Reserve's decisions will strictly depend on the evolution of subsequent inflation, especially the stickiness of core services and employment data; any fluctuations in data could disrupt expected rhythms.

Regarding market expectations for the cumulative rate cuts within the year, I hold a different view. Firstly, the probability of a 25 basis point rate cut is 48.9%, while the probability of a 50 basis point rate cut is as high as 46.5%, with both nearly evenly matched. This highlights the core uncertainty regarding the macroeconomic outlook. My core view is that a 25 basis point rate cut in September is the most likely starting point. Subsequent movements towards another 25 basis points or a quicker reach to 50 basis points will depend on market conditions. Reasons supporting a larger rate cut of 50 basis points may include intensified economic downturn risks or a confirmed inflation trend. In contrast, a preference for a moderate rate cut of 25 basis points may stem from inflation not meeting targets or the economy demonstrating resilience. The market currently implies expectations of a soft landing + 50 basis points, but if inflation proves sticky or economic resilience exceeds expectations, the risk of only one rate cut of 25 basis points for the entire year or delaying subsequent actions cannot be overlooked.