Market Overview Analysis by Investing.com (Calogero Selvaggio) covering: United States 6-Month. Read Investing.com (Calogero Selvaggio)'s latest article on Investing.com
The bond market doesn't yet reflect expectations for imminent rate cuts, but a modest cut might occur by December this year.This robust jobs market weakens the argument for the Fed needing to cut rates soon, potentially pushing back any potential cuts by at least 6 months.Look at the chart showing the correlation between job openings and year-on-year CPI below:
The graph reveals a critical data point: labor force participation has surged by over 83%, the highest since May 2002 and the entire post-Covid era. This strong participation rate, especially among those aged 25-54, suggests a robust labor market. or the potential activation of the Sahm rule? Not necessarily. With a healthy labor participation rate, these factors might hold less weight.
This suggests that a rate cut isn't imminent, but December's FOMC meeting could be a turning point. Based on this data, the most likely scenario is a single, modest 0.25% cut in December 2024. Overall, the bond market hints at a potential shift, but for now, expect limited cuts this year.
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