Strong US jobs data push Fed rate cuts further out of reach
What's new: Traders sharply reduced odds of a June cut and priced in roughly a 70% chance of a hike by late 2026.
A stronger-than-expected May jobs report has made near-term Federal Reserve rate cuts far less likely, adding pressure on new Chair Kevin Warsh as he navigates disagreements inside the central bank. Nonfarm payrolls rose by 172,000 in May, with prior months revised higher, reinforcing the view that the labor market does not need support even as inflation remains elevated. Market pricing after the report showed little expectation of easing at the Fed's June 16-17 meeting and rising odds of a rate increase by the end of 2026, according to CME Group's FedWatch. At the same time, Fed officials including Christopher Waller, Alberto Musalem and Lorie Logan have publicly challenged key assumptions tied to inflation, productivity and preferred price gauges.
Earlier in this story
- Jun 6US added 172,000 jobs in May as unemployment held at 4.3%
- Jun 6Strong US jobs data push Fed rate cuts further out of reachreading now
- Jun 6US adds 172,000 jobs in May, pushing Fed rate cuts further back
- Jun 6US added 172,000 jobs in May as unemployment held at 4.3%