Since unemployment was higher than expected and is potentially nearing a cycle high, the CME FedWatch tool reported that bets for a Fed interest rate cut in September improved to 87% on August 1 from 38% on July 31. The Fed held interest rates unchanged at a range of 4.25% to 4.50% on July 30, but not every voting member agreed.

The Federal Reserve won’t cut interest rates until it sees how inflation and job creation respond to higher tariffs. The next big bite of the apple arrives on Friday with the July employment report. Here’s what to expect.

Federal Reserve Chair Jerome Powell repeatedly described the labor market as solid and balanced at his press conference on Wednesday after the Fed held rates at 4.25%-4.50%. Still, he acknowledged there are downside risks.