The Fed predicts everyone is watching
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We’re completely back to macro play.
That is the expected movement of the Fed. And on Thursday, the incredibly robust June Jobs report This month, the possibility of interest rate reductions has dramatically reduced.
The central bank, reflected in the charts that everyone sees, is on a stable path to hold and reaffirms the view that the economy is sufficient for policymakers. To wait for more clarity on customs duties Or for further signs of trouble.
read more: How Fed rate decisions affect bank accounts, loans, credit cards and investments
A sudden reversal after Wednesday’s data ADP showing weaknesses in private paythe employment report appeared to end the growing speculation that the Fed would intervene at the end of the month to protect the deteriorating labor market.
“There were some softness factors under the headlines that were better than expected, but the June employment report has been strong enough to allow the Federal Reserve to hold off policy as it monitors the impact of tariffs on inflation.”
As this week’s chart shows, the market is currently priced at a July meeting with just 5% chances of falling from the 24% chance of central banks seeing a day ago. CME FedWatch Tool.
Promising job data has shifted expectations further down the calendar. Traders have experienced skeptical growth of September cuts from the Fed, with the market now priced at 68% of the time, down from the 94% chance that the Fed had observed a week ago.
LPL Financial Chief Economist Jeffrey Roach said the Fed could comfortably sit in “wait and watch” mode with payroll like this, but said, “The administration is still actively negotiating with some key trading partners, and the ultimate impact on business is unknown.” In other words, there can be a lot of things happening.
The chart as a stand-in for a preview of Fed policy brings political implications.
Just a day before the number of jobs came out, President Trump unleashed his toughest criticism of Fed Chairman Jerome Powell. In a true social post on Wednesday night, Powell said the president.”I should resign soon“Today expand Enhanced White House Pressure Campaign To central bank leaders. On Thursday, Treasury Secretary Scott Bescent He questioned the Federal Reserve ruling Interest rates suggest that the benchmark rate is too high.
