Standard Charter is forecasting a 50bps Fed cut in September by the FOMC

[FOMC symbol decoration ornament Federal Open Market Committee banking currency monetary datum wealth policy rate debt fund success exchange trade economy price inflation treasury making money crisis]

The Federal Reserve’s upcoming policy meeting on September 17 is drawing heightened attention from markets, with speculation building over whether the central bank will opt for a modest 25 basis point reduction, hold rates steady, or pursue a more aggressive 50 basis point cut.

Standard Chartered has positioned itself in the latter camp, citing weakening labor market data as the key driver behind its view. Friday’s nonfarm payrolls report showed the U.S. economy added just 22,000 jobs in August, well below the 75,000 consensus estimate.

Standard Charter highlighted that Fed Chair Jerome Powell had maintained as recently as the July 30 meeting that the labor market remained “solid.” However, his tone shifted during the August 22 Jackson Hole symposium, signaling greater concern about economic momentum.

“We think the August labour-market data has opened the door to a ‘catch-up’ 50bps rate cut at the September FOMC meeting,” Standard Chartered global research team indicated.

The investment institution also tempered expectations for a broader easing cycle, adding: “However, we still think sticky inflation and fiscal easing will limit scope for further cuts beyond that.”

Markets will now look to upcoming inflation figures this week and Fed commentary in the days ahead for clarity on the central bank’s next move.

MARKET TRACKING ETFS: (NYSEARCA:DIA [https://seekingalpha.com/symbol/DIA]), (NYSEARCA:DDM [https://seekingalpha.com/symbol/DDM]), (NYSEARCA:DOG [https://seekingalpha.com/symbol/DOG]), (NYSEARCA:DXD [https://seekingalpha.com/symbol/DXD]), (NYSEARCA:SDOW [https://seekingalpha.com/symbol/SDOW]), (NYSEARCA:SPY [https://seekingalpha.com/symbol/SPY]), (NYSEARCA:VOO [https://seekingalpha.com/symbol/VOO]), (NYSEARCA:IVV [https://seekingalpha.com/symbol/IVV]), (NYSEARCA:RSP [https://seekingalpha.com/symbol/RSP]), (NYSEARCA:SSO [https://seekingalpha.com/symbol/SSO]), (NYSEARCA:UPRO [https://seekingalpha.com/symbol/UPRO]), (NYSEARCA:SH [https://seekingalpha.com/symbol/SH]), (NYSEARCA:SDS [https://seekingalpha.com/symbol/SDS]), (NYSEARCA:SPXU [https://seekingalpha.com/symbol/SPXU]), (NASDAQ:QQQ [https://seekingalpha.com/symbol/QQQ]), (NASDAQ:QQQM [https://seekingalpha.com/symbol/QQQM]), (NASDAQ:TQQQ [https://seekingalpha.com/symbol/TQQQ]), (NYSEARCA:QID [https://seekingalpha.com/symbol/QID]), and (NASDAQ:SQQQ [https://seekingalpha.com/symbol/SQQQ]).

MORE ON MARKETS

* Huntington Bancshares Incorporated (HBAN) Presents at Barclays 23rd Annual Global Financial Services Conference - Slideshow [https://seekingalpha.com/article/4820477-huntington-bancshares-incorporated-hban-presents-at-barclays-23rd-annual-global-financial]
* Klarna IPO Update: Don't Buy Now Or Later [https://seekingalpha.com/article/4820254-klarna-ipo-update-dont-buy-now-or-later]
* BABX Could Be A Good Tactical Investment But Beware Of The Risks [https://seekingalpha.com/article/4820449-babx-good-tactical-investment-beware-risks]
* Eli Lilly succeeds in late-stage leukemia treatment trial [https://seekingalpha.com/news/4493044-eli-lilly-succeeds-in-late-stage-leukemia-treatment-trial]
* Arch Capital ups stock buyback program by $2B [https://seekingalpha.com/news/4493052-arch-capital-ups-stock-buyback-program-by-2b]