PANews reported on August 2 that according to Jinshi, Wasif Latif, president and chief investment officer of Sarmaya Partners, commented on the July non-farm payrolls in the United States. This is what a growth panic looks like. The market now realizes that the economy is indeed slowing down. The unemployment rate is an autocorrelation function number, so once it starts moving in a certain direction, it usually continues to move in that direction. I think the market also quickly realized that it might be a mistake for the Fed not to cut interest rates. Historically, the Fed has tended to wait longer, eventually pushing the economy into a slower growth zone. Obviously, they rely on the data, and now that the data is out, they may do what they need to do in September, but September is a bit far for the market, and the market is currently in a panic. In this environment, bond prices are expected to rise due to factors such as economic slowdown and investors turning to high-quality assets.
In addition, Melissa Brown, managing director of applied research at Simcorp, said that the actual non-farm data was a bit shocking compared to expectations. It was much lower than expected, but it was a positive number. This is not the lowest level we have ever seen. Job growth may be low enough to trigger the Fed to take action at the next meeting, but it is not low enough to show signs of recession. The number of unemployed people was higher than expected and higher than it has been for some time. This is a bit worrying, but it is still relatively low. There is still a lot of data to be released between now and the next meeting. A 50 basis point rate cut is possible, but it is unlikely given the Fed's cautious attitude. It will depend on the data in the next few weeks. Hourly wages are slightly lower, which means that the next inflation report will be very important, reflecting the contrast between overall inflation and income growth.
