The data sparked debate about whether the monetary easing cycle would end at a higher interest rate than previously expected.
On Friday, the US Department of Labor announced an increase of 254,000 jobs in September and a decrease in the unemployment rate to 4.1 percent, which prompted traders to reduce bets on another significant reduction in the cost of borrowing before the end of this year.
Traders are currently betting on a cut Interest A quarter of a percentage point in the upcoming meetings of the US Central Bank and reaching a range ranging from 3.25 percent to 3.75 percent by the middle of next year, compared to the current range of 4.74 percent to five percent, which exceeds the final range that traders had previously expected at three to 3.25 percent.
An interest rate above three is likely to continue to impose some restrictions on job growth and spending, based on estimates by Federal Reserve policymakers that the 2.9 percent rate is a “neutral” level that does not inhibit or stimulate the economy.
Economists at the Bank of Montreal wrote that Friday’s jobs report “could be a game-changer for the Federal Reserve and market expectations about the size and pace of future interest rate cuts… It also poses a significant risk to our expectations for consumer spending and GDP growth in the near term.” “, according to Reuters.
Expectations could change before the US Federal Reserve’s monetary policy meeting on November 6-7, which will be held after the release of new data on… Inflation And another monthly report on jobs.
The Federal Reserve has stated that it wants to reset interest rates in line with inflation falling to near its 2 percent target and slowing Labor market.
