Fed rate path hinges on US payrolls
by AIB Treasury Economic Research Unit
- With rate futures broadly settled following some volatility and re-pricing in August, next week’s US payrolls data remains the key pivot point, as the Fed prepares to embark on its rate cutting cycle.
- In our latest Forex and Interest Rate Outlook (released 30th August), we have 75bps of cuts pencilled in by end-2024 by the Fed, which is less than the market expectation of 100bps.
- On currencies, we see further modest weakening in the dollar from historic highs, as both US GDP growth and interest rates begin to converge with other majors.
- Turning to the week ahead, the aforementioned US labour market report for August will be the highlight.
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