Fed Meeting
Back in the US, the most relevant question now becomes the extent to which the August inflation data will reshape the market’s expectations for the Fed’s decision next week, according to Ian Lyngen and Vail Hartman at BMO Capital Markets.
“The Fed is cutting 25 basis points — barring a far more dramatic downshift in the trajectory of realized inflation, in which case a half-point cut could be on the table,” they said. “We’re solidly in the quarter-point camp and view the August inflation update as more meaningful for the conversations about where the Fed cutting cycle ends, not how it begins.”
In the run-up to the inflation reports, government data showed US job growth was far less robust in the year through March than previously reported. The number of workers on payrolls will likely be revised down by a record 911,000, or 0.6%, according to the preliminary benchmark revision out Tuesday. The final figures are due early next year.
Jamie Dimon said the record revision to US payrolls data is further proof that the US economy is battling a slowdown.
“The economy is weakening,” the JPMorgan Chase & Co. chief executive officer said in an interview with CNBC Tuesday. “Whether that is on the way to recession or just weakening, I don’t know.”
