CITIC Securities: It is expected that the Federal Reserve will cut interest rates by 25bps for the first time in September, with a total annual reduction space of 50-75bps

CITIC Securities research report pointed out that the number of new non-farm jobs in the United States in July 2024 was lower than expected. The revised previous value of new non-farm employment, rising unemployment rate, and slowing wage growth all indicate a continued cooling of the US labor market. However, marginal changes are not significant in historical data; an unemployment rate of 4.3% is still at a historically low level. Influenced by increased labor supply and weather factors, the data should not be over-interpreted. Non-farm employment data for July may deviate from the Federal Reserve's "sweet spot" but has not left its "comfort zone". Also, "recession trading" does not equate to an "economic recession". We expect that the Fed will cut interest rates by 25bps for the first time at September's FOMC meeting with room to decrease rates by 50-75bps throughout this year; within this year, we anticipate that yields on 10-year U.S Treasury bonds will fluctuate between 3.5-4.2%.