Citigroup Research stated in its US Economic Weekly report released on July 2nd that non farm payroll employment in the United States increased by 57000 in June, with a total downward revision of 74000 in the first two months. The average monthly non farm payroll growth in the past three months has dropped to about 111000, lower than the level of 180000 before the revision, and the reason for interest rate hikes has disappeared. Citigroup expects the Federal Reserve to cut interest rates by 25 basis points for the first time at its meeting on October 28, and another 25 basis points in December, bringing the federal funds rate range to 3.0% to 3.25% by the end of the year.
AI interpretation: The significant slowdown in non farm employment growth and the significant downward revision of the previous value directly reveal the intensification of the supply-demand imbalance in the labor market. The decline in employment momentum has completely blocked the space for further interest rate hikes by the Federal Reserve. This data reinforces the reality of economic cooling, forcing the focus of monetary policy to shift from anti inflation to anti recession. The market has solid macro fundamental support for early pricing at the time of interest rate cuts.
