It Is Still Possible That The Fed Will Continue To Wait And See Interest Rates Increase.
When considering whether and when to raise short-term interest rates again, the employment report on Friday will keep the Fed on the sidelines, resulting in a reduction in its chances of taking action at the next meeting of -15 June 14th.
In recent days, more than
Federal Reserve
Officials tried to remind investors that if the US economic output could regain kinetic energy after slow growth in the first quarter, then it would be possible to raise interest rates in June.
However, in April, the number of new jobs in the United States was 160 thousand, which was lower than the average monthly level of 229 thousand in 2015. This situation obviously does not support the idea of raising interest rates in June.
Many Federal Reserve officials said before the April employment report that raising interest rates in June is still possible.
But investors are not convinced.
Before the publication of the employment report,
futures market
Traders believe that the probability of raising interest rates in June is only 4%.
The Federal Reserve raised its benchmark interest rate to 0.25% and 0.5% in December last year, and since then it has kept the interest rate unchanged.
The same is true of the decline in the employment rate in April.
In April, the labour force participation rate dropped from 63% in the previous month to 62.8%, which means that the number of people looking for jobs is further reduced.
However, the employment report does contain some highlights, such as the average hourly wage rose by 2.5% over the same period last year.
Federal Reserve officials are looking for signs of wage growth as the job market fades.
In addition, Britain will remain in the federal reserve after its June policy meeting.
European Union
Holding a referendum may disrupt the market and make the prospect of raising interest rates even more complicated.
Overall, the employment report on Friday did not completely eliminate the possibility of raising interest rates in June, but the new round of consumption, inflation and employment data needed to be improved before the Fed was convinced of the need to raise interest rates.
Now, it seems more likely that the Fed will raise interest rates later.
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The dollar rose on Friday, although the new US employment report was less than expected.
The US dollar index has rebounded by about 2% from 91.919 on Tuesday, the lowest in January.
Traders concluded that the disappointing employment report would not change the Fed's path to raise interest rates.
According to a report released by the Ministry of labour on Friday, the number of non farm payrolls increased by 160 thousand seasonally adjusted in April, the smallest increase since September last year, lower than the 205 thousand increase expected by economists.
One of the highlights of the report is that wage levels rose by 2.5% over the same period last year, higher than the increase in March.
According to data provided by CME Group, federal reserve fund interest rate futures, which investors and traders used to bet on the Fed's policy, show that the probability of raising interest rates by the Federal Reserve before December is 61%. According to the data of the federal reserve fund interest rate futures, which is used to bet on the Federal Reserve Policy on Friday,
William Northey, who is the chief investment officer of U.S. Bank's private client group and helped manage 125 billion dollar assets, said: "there will be two interest rate hikes this year, which may just start later. Although the employment report is somewhat weak, I think the fundamental trend is the most important, and this trend is very healthy; we expect the US dollar to go higher."
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