Story perspectives

Standard Chartered Forecasts Fed's 50 Basis Point Rate Cut

9/8/2025

Summary

Federal Reserve Cuts

Standard Chartered now predicts a 50 basis point interest rate cut by the U.S. Federal Reserve in September.
This change follows weak August jobs data, with only 22,000 non-farm payrolls added and unemployment rising to 4.3%.
The labor market has shifted from "solid to soft" in less than six weeks.
Other banks, like Bank of America and Barclays, expect multiple 25 basis point cuts this year.
Markets indicate a 90% chance of a 25 basis point cut, with only a 10% chance for a larger reduction.

Summary

Dollar Declines, Rate Cut

The U.S. dollar declined after weak August jobs data, increasing expectations for a Federal Reserve rate cut.
Markets predict a 90% likelihood of a 25 basis-point cut and a 10% chance of a 50 basis-point reduction.
Japanese Prime Minister Shigeru Ishiba's resignation creates uncertainty in Japan's economic policy, affecting the yen and bond yields.
Investors await the U.S. inflation report, which may impact the Fed's rate cut decision.
Gold prices stay near record highs, indicating investor caution amid economic uncertainties.

History

Historical Context

In response to the 2008 financial crisis, the U.S. Federal Reserve slashed interest rates to near-zero, resulting in a 5% unemployment rate and the loss of 8.7 million jobs. Today, as unemployment rises to 4.3% amid weak job growth, the Fed's potential 50 basis point cut reflects ongoing economic uncertainty, impacting global markets and investor behavior in currencies and commodities like gold.

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Federal Reserve Cuts

Standard Chartered now predicts a 50 basis point interest rate cut by the U.S. Federal Reserve in September.
This change follows weak August jobs data, with only 22,000 non-farm payrolls added and unemployment rising to 4.3%.
The labor market has shifted from "solid to soft" in less than six weeks.
Other banks, like Bank of America and Barclays, expect multiple 25 basis point cuts this year.
Markets indicate a 90% chance of a 25 basis point cut, with only a 10% chance for a larger reduction.

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