Fresh labor market data has come out, and most importantly - the NFP figures for May and June have been revised.
Why this is important: this revision collectively resulted in -258k jobs:
⚪️The NFP figure for May has been revised to +19k from +147k.
⚪️The NFP figure for June has been revised to +14k from +147k.
Now the situation in macro is actually turning upside down, as in the last three months the average increase in the number of jobs was +35k - this is the weakest hiring pace since the beginning of 2020.
Members of the Fed have already expressed their views on this matter:
Bowman (Fed):
-"There is a risk that delaying actions could lead to a deterioration in the labor market and further slow down economic growth.
-I believe that a gradual reduction in the rate towards a neutral level will help keep the labor market close to full employment and ensure progress in achieving both goals of the Fed.
Waller (Fed):
-I see no reason to keep the rate at the current level and risk a sharp decline in the labor market.
They say that if the Fed had updated NFP data before the interest rate decision, they would have lowered the rate. Now the market is pricing in an 80% probability of a reduction in September.
P.S. In your opinion, will there be a rate cut in September?
😈 Yes, there will be a reduction, it’s about time.
🔥 No, keep it at the same level of 4.25-4.5%