Goldman Sachs Trader: Fed’s Rate Cut Pace and Scale Depend on September Nonfarm Payrolls

According to a report by Jinse Finance, Goldman Sachs fixed income (FICC) traders, including Rikin Shah, stated that the market had been in a wait-and-see mode ahead of the Jackson Hole meeting. Powell’s latest remarks have effectively given the green light for a rate cut in September, especially against the backdrop of recent employment data revisions that have drawn the Federal Reserve’s attention to the labor market. This is a typical example of the “downside risks to the labor market” that Powell mentioned at the last FOMC press conference and reiterated in his speech at the Jackson Hole central bank symposium. Goldman Sachs traders believe that if nonfarm payroll growth in August falls below 100,000, particularly in the face of political pressure, it will help solidify the case for a rate cut in September. Goldman Sachs points out that if the labor market weakens further, the window of opportunity is now. The bank believes that whether in a scenario of economic slowdown or normalization, the Federal Reserve is very likely to complete this rate-cutting cycle before the next Fed chair takes office, that is, before the end of the first half of 2026.