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U.S. Labor Market Weakens, Fed Expects to Cut Interest Rates

According to PANews, Mizuho Bank indicated that the U.S. labor market is showing signs of weakening, as evidenced by the August non-farm payroll report. Employment, hours worked, and income growth have returned to levels seen during the pandemic. Regardless of inflation trends, the Federal Reserve is almost certain to cut interest rates at its September meeting. A 25 basis point reduction is almost guaranteed, but if August's inflation is weaker than expected, a 50 basis point cut is more likely.

Previous inflation forecasts from the Federal Reserve have been contradictory to reality, and its unemployment rate forecasts for 2026 face the risk of not materializing. The Fed was previously very pessimistic about inflation and overly optimistic about the labor market. The Federal Reserve is expected to initiate a sustained easing cycle, aiming to reduce rates to what it considers a 'neutral level', approximately 3% by March 2026. The new chair of the Federal Reserve is likely to further increase stimulus measures, potentially reducing rates to near 2%.

However, there is a risk that if inflation resurges, at least some of the stimulus measures may be withdrawn by 2027.#USNonFarmPayrollReport #BinanceHODLerOPEN #MarketPullback #ListedCompaniesAltcoinTreasury #BinancehodlerSOMI