A trust crisis sweeping the market! From "data manipulation" to firing the BLS director, the US non-farm payrolls step into the era of "corrections are king".

The U.S. government released revised major non-farm employment data on August 1, showing that the actual situation of the U.S. labor market is worse than expected by Wall Street economists. This development has shaken the market as a whole and prompted U.S. President Donald Trump to claim without any evidence that the numbers are "considered manipulated." He also fired the top official at the U.S. Labor Department responsible for statistical data. In the eyes of some economists, the cries of "data manipulation" by top Wall Street traders in the Trump administration and the direct dismissal of the Bureau of Labor Statistics (BLS) director are filled with doubt and dissatisfaction. These actions by the Trump administration could severely damage confidence in the financial markets. "We no longer pay attention to the initial non-farm values, but wait for the revised non-farm values to judge the market trading situation," this unprecedented trend may become an important theme for stock, bond, and foreign exchange trading in the coming period. The non-farm employment data released last week showed a significant cooling of the U.S. labor market in recent months. Data from the Bureau of Labor Statistics showed that in July, businesses added only 73,000 jobs, significantly lower than the expected 110,000 jobs. At the same time, the initial non-farm employment numbers for the previous two months were unexpectedly revised downward by nearly 260,000, a revision rate of 90%. The latest unemployment rate increased from 4.1% in June to 4.2%. As a result, this non-farm data largely fueled traders to bet heavily on a Fed rate cut. Pricing in the interest rate futures market indicates that traders are heavily betting on a restart of the Fed rate cut cycle, with the probability of a Fed rate cut next month approaching 90%compared to less than 40% before the non-farm data was released. Traders are even betting on two consecutive rate cuts of 25 basis points in September and October, followed by another 25 basis point cut in December, totaling three rate cuts of 75 basis points by the end of the year. Furthermore, more aggressive traders are even betting on a script similar to 2024i.e. a 50 basis point rate cut in September, followed by 25 basis point cuts in October and December, indicating a potential total cut of 100 basis points before the end of the year. "We still need to remember the situation last summerthe Fed kept the rate unchanged in July, but later receive...