CICC: The Fed shifted its focus from prices to employment, basically declaring victory in the fight against inflation

BlockBeats news, on August 24, CICC commented on the speech of Fed Chairman Powell at Jackson Hole, saying that it was basically clear that the September rate cut was a done deal, which was in line with expectations. CME interest rate futures factored in a 76% probability of a 25bp rate cut in September and a 24% probability of a 50bp rate cut. The Fed shifted its focus from prices to employment, basically announcing victory in the fight against inflation (saying that inflation expectations have been well anchored), and assessed the job market as no longer overheated, balanced, and with rising risks.

It did not mention how much the rate would be cut in the future, and it still depends on the data. A 50bp rate cut is not realistic at the moment, at least it depends on the non-farm data next month. Powell also does not think that the rise in unemployment is a deterioration in the job market, and believes that it is mainly due to more people entering the labor market and a slowdown in recruitment. The attitude towards the job market is: observation and vigilance, (Jinshi)