The latest jobs report for May has put a damper on Wall Street's expectations for a potential interest rate cut by the Federal Reserve in September. The report revealed a strong performance in both hiring and wage growth, indicating that the American job market continues to thrive. This positive trend could hinder efforts to bring inflation down to the Fed's target of 2%.
Following the release of the employment data, traders exhibited a more cautious outlook on the possibility of a rate cut in the near future. Market sentiment now leans towards the likelihood of the Fed maintaining current interest rates at its upcoming September meeting, rather than implementing a cut.
According to futures data, investors are now anticipating that the first rate cut by the Fed may not occur until December. This shift in expectations reflects the market's response to the robust job market performance in May, which has raised concerns about the need for immediate monetary policy adjustments.
