U.S. Unemployment Claims Surge, Fed Rate Cuts Anticipated

According to PANews, recent reports indicate that U.S. unemployment claims have surged to their highest level in nearly four years. This development has intensified speculation in the short-term interest rate futures market regarding potential Federal Reserve rate cuts. Initially, the market anticipated at least two rate cuts by the end of the year. However, expectations have shifted, with predictions now suggesting four consecutive rate cuts from September through January, and a full pricing of three rate cuts within the year. Despite these expectations, the stronger-than-expected rise in the August Consumer Price Index (CPI) may hinder the Federal Reserve from implementing significant rate cuts. The probability of a 50 basis point rate cut by the Federal Reserve in September has slightly increased from 8% to 10.9% following the report.