Key Facts
• On September 16-17, the Federal Reserve (Fed) is expected to resume rate cuts.
• U.S. Labor Department data shows job creation from March 2024 to March 2025 was 910,000 lower than prior estimates.
• Monthly job growth may have been less than half the estimated 147,000 average.
• August non-farm payrolls increased by only 22,000, far below the forecasted 75,000.
• Unemployment rose to 4.3%, the highest in nearly four years.
• Financial markets anticipate a 0.25% rate cut in September, October, and possibly December.
• Economist Sal Guatieri suggests the Fed may implement more than two rate cuts this year.
• The August Consumer Price Index (CPI), set for release on September 11, is under close market scrutiny.
Summary
The Federal Reserve is poised to resume rate cuts during its September 16-17 meeting, with further reductions likely through the end of 2025. This decision follows U.S. Labor Department data revealing a significant slowdown in job growth, with 910,000 fewer jobs created over the past year than previously estimated. August non-farm payrolls rose by just 22,000, well below expectations, while unemployment climbed to 4.3%, a four-year high. Financial markets predict a 0.25% rate cut in September and October, with a potential third cut in December. Economist Sal Guatieri notes that the Fed may exceed its initial projection of two rate cuts this year. The August CPI report, due September 11, is expected to influence future monetary policy decisions.
