💢The worse the economy, the better for the markets
On Tuesday, I wrote that the main indicator for the Fed would be the labor market data. This will determine the decision on the key rate.
Today, the real numbers came out: job growth was only 22 thousand compared to expectations of 75 thousand.
📊 What happened?
The economy is slowing down: job creation has almost stopped, unemployment is slightly higher, and wages are rising moderately. These indicators suggest that the economy needs support.
⚖️ What does this mean for the Fed's rate
💥Markets have heightened expectations for policy easing: the probability of a 0.25% rate cut has risen to 99% according to market participants. This supports risk assets and weakens the dollar.
💥On September 11, the inflation report will also be released, which will determine how strong the decline will be.
💥And the decision on the interest rate will be announced on September 17.
