PANews reported on September 6th that, according to Jinshi, Mizuho Bank stated that the August US non-farm payroll report further confirmed the weakening tone of the labor market, with employment, work hours, and income growth rates falling back to pandemic-era levels. Regardless of inflation, the Federal Reserve is almost certain to cut interest rates at its September meeting. A 25 basis point cut is almost certain, but if August inflation falls short of expectations, a 50 basis point cut is more likely. The Fed's previous inflation forecasts have been contradicted by reality, and its 2026 unemployment rate forecast is at risk of being unfulfilled. The Fed was previously overly pessimistic about inflation and overly optimistic about the labor market. The Fed is expected to embark on a sustained easing cycle, aiming to lower interest rates to what it considers a "neutral level," around 3% by March 2026. The new Fed chair is likely to further increase stimulus measures, lowering interest rates to close to 2%. However, the risk is that if inflation resurfaces, at least some of the stimulus measures will be withdrawn by 2027.PANews reported on September 6th that, according to Jinshi, Mizuho Bank stated that the August US non-farm payroll report further confirmed the weakening tone of the labor market, with employment, work hours, and income growth rates falling back to pandemic-era levels. Regardless of inflation, the Federal Reserve is almost certain to cut interest rates at its September meeting. A 25 basis point cut is almost certain, but if August inflation falls short of expectations, a 50 basis point cut is more likely. The Fed's previous inflation forecasts have been contradicted by reality, and its 2026 unemployment rate forecast is at risk of being unfulfilled. The Fed was previously overly pessimistic about inflation and overly optimistic about the labor market. The Fed is expected to embark on a sustained easing cycle, aiming to lower interest rates to what it considers a "neutral level," around 3% by March 2026. The new Fed chair is likely to further increase stimulus measures, lowering interest rates to close to 2%. However, the risk is that if inflation resurfaces, at least some of the stimulus measures will be withdrawn by 2027.

Mizuho Bank: The Federal Reserve has been "slapped in the face" by reality, and the easing cycle is about to begin

2025/09/06 14:56

PANews reported on September 6th that, according to Jinshi, Mizuho Bank stated that the August US non-farm payroll report further confirmed the weakening tone of the labor market, with employment, work hours, and income growth rates falling back to pandemic-era levels. Regardless of inflation, the Federal Reserve is almost certain to cut interest rates at its September meeting. A 25 basis point cut is almost certain, but if August inflation falls short of expectations, a 50 basis point cut is more likely. The Fed's previous inflation forecasts have been contradicted by reality, and its 2026 unemployment rate forecast is at risk of being unfulfilled. The Fed was previously overly pessimistic about inflation and overly optimistic about the labor market. The Fed is expected to embark on a sustained easing cycle, aiming to lower interest rates to what it considers a "neutral level," around 3% by March 2026. The new Fed chair is likely to further increase stimulus measures, lowering interest rates to close to 2%. However, the risk is that if inflation resurfaces, at least some of the stimulus measures will be withdrawn by 2027.

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