When will the signal for interest rate cuts in the United States materialize? Analysis of key time points and influencing factors.

Recently, global financial markets have been closely watching the direction of U.S. monetary policy, with the timing of interest rate cuts becoming a focal topic. From various signs at present, it seems that a U.S. interest rate cut may be imminent.

From the performance of economic data, the U.S. non-farm payroll data for August added only 22,000 jobs, far below expectations, and the unemployment rate has reached a four-year high, indicating a significant weakening of the job market. The GDP growth rate in the first half of the year was halved to 1.2%, showing insufficient economic growth momentum. Meanwhile, the Producer Price Index (PPI) fell by 0.1% month-on-month, marking the first decline in four months, alleviating inflationary pressures. This data provides some support for the Federal Reserve to cut interest rates.

In terms of market expectations, according to the CME "FedWatch" tool, as of September 12, the probability of the Federal Reserve cutting rates by 25 basis points in September is 93.9%, the probability of a 50 basis point cut is 6.1%, and the cumulative probability of a 50 basis point cut by October is 86.8%. A Reuters survey of 107 analysts found that nearly all believe the Federal Reserve will cut rates by 25 basis points after the meeting on September 17-18, with most analysts expecting further cuts next quarter. Some traders have even fully priced in three rate cuts by the Federal Reserve before the end of 2025, corresponding to the interest rate decisions on September 17, October 29, and December 10.

The statements from officials within the Federal Reserve have also released some signals. Governor Waller expects the Federal Open Market Committee (FOMC) to cut rates by 25 basis points in September, and to continue advancing the rate-cutting process over the next 3 to 6 months. He believes that the current basis for supporting a Fed rate cut is more sufficient and strong compared to July.

Considering various factors, the Federal Reserve is highly likely to announce its first interest rate cut around 2 AM Beijing time on September 19, following its policy meeting on September 17-18, with a high probability of a 25 basis point reduction. There is also the possibility of further rate cuts in the meetings in October and December. However, the final decision on rate cuts will still need to pay attention to key data released before the meetings, such as the non-farm payroll data for August released on September 5 and the CPI inflation data for August released on September 11. If the data shows an economic slowdown and controlled inflation, a rate cut in September is basically secured; if the data is unexpectedly strong, the rate cut may be delayed.