Barclays Bank said on Friday that despite market bets that the Federal Reserve may cut interest rates in September, recent US employment data is unlikely to change Fed Chairman Jerome Powell's cautious attitude towards interest rates. The bank expects only a 25 basis point rate cut in December this year and believes that investors are too optimistic about a September rate cut and misunderstand the Fed's view on the strength of the labor market.

Powell recently stated that policy is "only slightly constrained" given the "solid" labor market. Even with job growth slowing in July and the unemployment rate reaching 4.2%, Barclays sees no signs of a shift among hawkish FOMC members. September remains "uncertain," but the bank will be watching speeches at the Jackson Hole conference for clues.