Fed hike bets fade as US jobs growth slows
In short
US traders now think the Federal Reserve is less likely to raise rates again this year after the economy added just 29,000 jobs last month, versus 90,000 expected.
The unemployment rate rose to 4.2%, and October hike odds fell below 20%. Inflation is still a concern, but the Fed’s next move is not yet known.
What the reporting says
Traders lowered expectations for another US Federal Reserve rate hike later this year after the economy added only 29,000 jobs last month, far below the 90,000 economists expected. The unemployment rate rose to 4.2%, signaling a softer labor market, while inflation concerns remain. The reporting says October hike odds fell below 20%, but the final policy decision is still unknown.
Why it matters
The report says a softer US labor market changed expectations for Federal Reserve policy. Job growth came in at 29,000 last month versus 90,000 forecast, and unemployment rose to 4.2%. Traders then cut the chance of another rate hike in October to below 20%. Inflation pressure is still cited as a concern, so policy direction remains unsettled.