Fed Rate Cut Expectations May Extend to Q3 if February Jobs Report is Muted

Recent data shows that the US ADP employment figures and ISM non-manufacturing PMI for February both exceeded market expectations, indicating a degree of stability in the labor market, which the Federal Reserve is closely monitoring. In addition, the Federal Reserve has previously signaled that it is in no hurry to cut interest rates, and due to the impact of the war, domestic energy prices have soared. Market expectations for the timing of the next rate cut have been pushed back to September. If the February non-farm payroll data is lackluster, or is overshadowed by the war situation, then in a foreseeable scenario of inflationary rebound, market expectations for the Fed's first rate cut may extend into the third quarter.