Market participants: If the Federal Reserve significantly cuts interest rates, it may trigger panic

The U.S. July non-farm payroll report showed weakness, intensifying concerns that the Fed cut rates too late. However, market participants do not expect a 50 basis point rate cut by the Fed in September, as such a large rate cut may be seen as a warning signal. Many economists monitoring the Fed believe that the U.S. employment data is not severe enough to warrant emergency action by the Fed. Joseph Lavorgna, Chief Economist at SMBC Nikko Securities, said, "A 50 basis point rate cut by the Fed would cause panic, as market expectations for a significant rate cut are too premature."