Nonfarm Payroll Data May Influence Fed's September Rate Cut Decision

According to Odaily, Wall Street analysts believe that this week's nonfarm payroll data could be a decisive factor in the Federal Reserve's decision on the extent of the rate cut in September. Citibank analysts predict that nonfarm payrolls will increase by 125,000 in August, a slight rise from July's 114,000. The unemployment rate is expected to remain stable at 4.3%, with a possibility of dropping to 4.2%. Citibank suggests that if the employment report aligns with their forecast—showing a 125,000 increase in payrolls and a 4.3% unemployment rate—the Federal Reserve may opt for a 50 basis point rate cut at the upcoming September meeting. The rationale for the rate cut is the downside risk in the labor market, particularly if job growth falls below 175,000 and the unemployment rate remains high.