Possible Pause for the Fed
A weak job growth number was released this past Friday showing a growth in May of only 75,000 jobs were added to non-farm payrolls. This fell well short of the 175,000 that was predicted to be added in the month of May.
With a weakening job growth picture, there is belief amongst some on Wall Street that the Fed will pause in June it's recent push higher of interest rates. The Fed had been raising interest rates to battle the inflationary picture. With a weaker jobs picture and a belief because of this that we may see corporate profits that are not as strong as they have recently been, inflation may not be as bad as was once thought.
With a weakening job growth picture, there is belief amongst some on Wall Street that the Fed will pause in June it's recent push higher of interest rates. The Fed had been raising interest rates to battle the inflationary picture. With a weaker jobs picture and a belief because of this that we may see corporate profits that are not as strong as they have recently been, inflation may not be as bad as was once thought.
3 Comments:
No offense, but the last fed meeting minutes showed they toyed with the idea of a 50 basis points hike.
Anyone who believes they won't raise rates either isn't in the know, or isn't paying attention to what the FED is saying.
Inflationary pressures are strong and building even more. Once they get started, it takes a herculean effort to stem.
Most economists agree that a .25 hike is in the bag and the bond market has priced it in. Please be advised.
As a side note, this is posted within .01" proximity of a story titled "labor cost index shoots up".
Of course, if you see inflation not as price movement but money supply (as a true Austrian), you would also be saying that there is substantial inflationary pressure.
Either way, it's 2 sides of the same coin, prices are going up and money supply is rapidly expanding. Both are inflationary signals.
In the notes different bankers were talking both about a 50 bp increase and no increase at all. The market is sending very mixed signals
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