Analysts widely expect the Fed to cut policy by a quarter-point, as employers continued to hire – albeit at a slower pace than before – and the unemployment rate is on the rise, albeit still at a relatively low 4.3%.
The authorities of the Federal Reserve They put their eye directly on the labor market United Statesin the anteroom of the monetary policy meeting this month. Bankers’ assessment of the health of the labor market will be key to determining the magnitude of the interest rate cut.
Analysts widely expect the Fed to cut monetary policy by a quarter pointas employers continued to hire – albeit at a slower pace than before – and the unemployment rate is on the rise, although at a relatively low level still 4.3%.
US job offers fell in July at its lowest level in three and a half years
Data released on Wednesday showed that Job offers fell in July to the lowest level in three and a half years. This may increase the feeling that the labor market is approaching a turning point and could strengthen the arguments for a further rate cut.
The relationship between job offers and job seekers -that the president of the Fed, Jerome Powelland other U.S. central bankers said they are watching closely – is now below the pre-pandemic average.
Financial markets raised bets on further rate cuts
Following the employment report, the financial markets Bets on further rate cuts rose at the Fed’s September 17-18 meeting. Futures contracts now see a half-point cut as almost as likely as a quarter-point cut.
“The report suggests that the labor market is cooling and that the pace of cooling may be accelerating,” he wrote. Julia Pollakof ZipRecruiterwho is among the minority of analysts who believe the Fed should have started cutting rates in July.
For their part, the Fed monetary policy makers They said they hope that the next monthly report about employment Friday and the data of the Consumer Price Index for Augustwhich will be announced next week. This will influence their judgment on the upcoming policy decision.
However, the direction of his next move is not in doubt.
“We should not maintain a restrictive policy stance for too long,” said the president of the Atlanta Fed, Raphael Bosticin an essay posted on the regional bank’s website ahead of Wednesday’s data.
Source: Ambito
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