Federal Reserve policymakers are likely to keep interest rates unchanged when they meet this month, but will leave the door open for a hike in July, following a government report that showed employment rose in May but wage gains cooled.
Traders now see a one in three chance that the Fed will raise rates for the 11th straight time at its June 13-14 meeting, up from a one in four chance before the Labor Department report, which showed businessmen added 339,000 jobs in May, well above the 190,000 economists expected.
However, average hourly earnings rose 4.3% from a year earlier, down from 4.4% in April, and the unemployment rate rose to 3.7% from 3.4%, both signs that the job market may be losing. bellows.
“This is a relief effect, is this the mythical soft landing? It seems“, said Kim Forrestof Bokeh Capital Partners. “This low wage inflation figure is very good news for those of us who believe that the fed I should take a break.”
Even so, the strong increases in employment kept expectations alive in the financial markets for the fed raise your benchmark rate another quarter point, to the 5.25%-5.5% range, in July.
Traders view this outcome as twice as likely as a hold, although there is much more data between now and then that could tip the bets one way or the other.
Source: Reuters
Source: Gestion
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