Fed Rate Cut Hopes Crumble as Jobs Market Flexes Muscle
Wall Street's rate-cut fantasies just got a reality check. June's nonfarm payrolls report came in hotter than a GPU mining rig, forcing traders to rethink their dovish bets.
The takeaway? The economy's still running red-hot—and the Fed won't be handing out monetary morphine anytime soon. Guess those 'soft landing' hopium dealers will need to adjust their spreadsheets again.
Funny how 'resilient data' always seems to mean 'your leverage positions are about to hurt.' Some things never change in this casino.
Confident Investing Starts Here:
- Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter
Furthermore, the unemployment rate remained unchanged from 4.2% last month. The rate has bounced between 4.0% and 4.2% since May 2024.
On the other hand, the government continues to slash jobs. Federal jobs dropped by 22,000 in May, bringing the year-to-date total to 59,000.
Market Rise, Rate Cuts Odds Fall on Jobs Report
The Fed’s dual mandate seeks to maximize employment and keep prices stable by keeping inflation at bay. With a better-than-expected nonfarm payrolls report, it’s less inclined to cut rates and stimulate the economy. Traders agree, as there is now a 99.9% chance that the Fed will leave rates unchanged at the June 18 meeting, up from 96.6% yesterday. Additionally, traders have assigned an 83.4% chance that rates remain unchanged on July 30, up from 68.6% yesterday.
The S&P 500 (SPX) is set to open higher by nearly 1% as the market digests the better-than-expected jobs report.
