Recent signs of weakness have appeared in the US economy, sparking heated discussions in the market about the direction of the Fed's monetary policy. The latest economic data shows that the Producer Price Index (PPI) turned negative month-on-month in August, non-farm employment only increased by 22,000 people, and the unemployment rate climbed to 4.3%. In addition, the non-farm employment data for the period from April 2024 to March 2025 has also been significantly revised down by 911,000.

In this context, Trump publicly stated that he expects the Fed to implement "significant rate cuts" and emphasized that there is currently "no inflation" problem in the United States. He urged the Fed to take immediate action while expressing dissatisfaction with Fed Chairman Powell. This statement has attracted widespread attention in the market.

However, the market has divergent views on the extent of rate cuts. Although the probability of a 25 basis point cut in September exceeds 90%, the likelihood of a 50 basis point cut is less than 10%. Some financial institutions, such as Standard Chartered and Guojin Securities, believe that given the rapid deterioration of the labor market and increasing political pressure, the Fed may take a more aggressive approach with a 50 basis point cut.

At the same time, institutions such as Morgan Stanley and Deutsche Bank hold differing views. They believe that the existing data is insufficient to support a 50 basis point rate cut decision. They warn that such a significant rate cut could send a severe economic outlook signal to the market, triggering panic and potentially leading to a rebound in inflation. They also point out that historically, similar magnitude rate cuts are often accompanied by economic recession.

The Fed is set to hold a monetary policy meeting from September 16 to 17, and its interest rate decision will have a significant impact on the global financial markets. Market participants will closely monitor the outcome of this meeting to assess the state of the U.S. economy and the future direction of monetary policy.