PROMPTpromptbidder प्राइस

stonk Surges 11.53% in 24H, Currently at 0.3067 USDT

Morgan Stanley strategists pointed out that the U.S. economy may experience a "jobless productivity boom," which will curb inflation and open the door for more interest rate cuts by the Federal Reserve. Data from the U.S. Department of Labor shows that the hourly output per worker for all non-farm businesses increased by 3.3% year-on-year in the second quarter, a significant improvement compared to the 1.8% year-on-year decline in the previous quarter. Investors' expectations for the pace of Federal Reserve rate cuts next year are more aggressive than official forecasts. According to the CME FedWatch tool, Federal Reserve officials expect only one rate cut in 2026, but investors believe there is a 72% chance of a rate decrease by the end of the year.

 Canadian Imperial Bank of Commerce pointed out that the non-farm employment data reflects a further weakening of the U.S. labor market conditions. On the other hand, more resilient consumption indicates that demand conditions remain quite favorable. Overall, this may prompt Federal Reserve policymakers who dissented at the last meeting to reassess their positions and increase the likelihood of an earlier rate cut in 2026. That said, Goolsby and Schmidt were the two main dissenters who called for holding rates steady last week, but they will leave their voting seats next year, likely to be replaced by Harnak and Logan, who may be more hawkish. Therefore, changing their minds to make them more committed to cutting rates will be a daunting task. However, the cooling labor market will continue to weaken their resolve, as the balance of data evidence undermines the Fed's rationale for keeping rates unchanged. Hence, the possibility of the Fed easing monetary policy earlier in 2026 is increasing.