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S&P: U.S. Job Growth Makes July Rate Hike Likely
Payroll jobs continue to grow and the unemployment rate remains near a 50-year low, making it likely the Federal Reserve will increase the Fed Funds rate later this month, said S&P Global Ratings, New York.
“Together with the strength of other recent data, a 25 basis point rate hike is almost certain at the Federal Reserve’s July meeting,” S&P Global Ratings said in a new non-rating action report, Strong U.S. Jobs Report Makes A Rate Hike All But Certain In July. (Subscriber link)
Satyam Panday, S&P Global Ratings chief economist for the U.S. and Canada, noted he currently does not expect any more rate hikes after July, “consistent with our forecast for below-potential growth, better balance in labor demand and supply, and a further slowing of inflation that will keep the Fed on the sidelines.”
The report noted future Fed action will depend on how the data evolves. “We currently anticipate the Fed will pause until next June, when we expect it to begin lowering rates,” S&P said.