The latest US CPI report was published on Wednesday:
JP Morgan in response:
- the CPI is a 'green light' for the Federal Open Market Committee (FOMC) to cut in September (the meeting is on Sep 18 and 19)
- the Fed may cut 50bp, or 25bp
JPM on what will prompt a 50bp cut (50bp is the JPM forecast):
- key factor will be the extent of the rebound in the August payroll report
- If job gains fall within the 160-200k range, it could alleviate much of the concern sparked by the July labor report
- However, if the gains are closer to the low-100s, the risk may shift toward growth, potentially leading to a larger cut
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The August US jobs report JPM refer to is due on September 6.
I guess if the number is low enough there could be a 50bp cut. Sheesh. Wouldn't 50bp just create a bit of panic?
