Recently, there has been an interesting economic phenomenon sparking heated discussion in the market — the possibility that the US may experience a "somewhat special" period of prosperity.

Wall Street analysts point out that the driving force behind this growth is not traditional employment expansion, but a significant increase in productivity. The data makes it clear: US non-farm business workers' hourly output in Q2 increased by 3.3% year-over-year, a notable improvement from the 1.8% growth in the previous quarter. This means fewer employees are producing more value, and corporate cost pressures are easing.

What impact does this have on inflation? It’s quite crucial. Increased productivity naturally reduces price pressures, giving the Federal Reserve more room to cut interest rates. This is not speculation — the market has already started pricing it in.

Comparing the expectations of Federal Reserve officials and the market is quite interesting: Fed officials expect only one rate cut by 2026, which sounds relatively cautious. But investors are much more aggressive, believing that the probability of US interest rates decreasing by the end of the year has already reached 72%. How this expectation gap will evolve in the future is worth watching in market trends.