Analysis: Powell has made this week's non-farm payroll data especially important; if the labor market data falls short of expectations, it will significantly increase rate cut expectations.
BlockBeats News, September 3rd: Antje Praefcke, a foreign exchange analyst at Deutsche Bank, pointed out that in his speech at the Jackson Hole symposium, Powell emphasized the downside risks facing the economy and employment. This is to balance the market's and the Federal Open Market Committee colleagues' expectations of interest rate cuts with the inflation risks that tariffs may bring. The focus on current labor market data has far exceeded the usual level, and the weight of the impact of this data will also be significantly increased.
This naturally also means that if the labor market data falls short of expectations, it may further significantly increase the market's expectations of a Fed rate cut, and may even reignite expectations of one or more 50 basis point rate cuts.
If this scenario occurs, it is expected that the US dollar will once again suffer a severe setback. If tomorrow's ADP data is lower than expected (market consensus is 80,000 people), it may set the stage for this bearish sentiment towards the dollar—although this index ultimately has little predictive significance for Friday's non-farm payrolls data. (FX678)
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