A stronger-than-expected labor report just crushed any hopes that the Federal Reserve would lower rates this month—despite speculation from Wall Street and direct demands from President Donald Trump.
In June, the U.S. economy added 147,000 jobs, topping forecasts, while the unemployment rate ticked down to 4.1%, according to the latest Bureau of Labor Statistics data released Friday. Those numbers make it hard for the Fed to justify an imminent rate cut, as inflation remains above the 2% target.
That’s a problem for Trump, who’s been repeatedly calling out Fed Chair Jerome Powell for delivering large rate cuts.
But the Fed appears unfazed—at least for now.
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Economists Just Don’t See Near-Term Fed Rate Cuts
Bank of America economist Aditya Bhave said the data was “solid,” adding that, “average job growth is above breakeven, and the u-rate is down. This should let the Fed stay in wait-and-see mode.”
He did flag a few concerns—like weaker private-sector job growth at just 74,000 and flat aggregate private income—but not enough to change the outlook.
Bhave reiterated his base case that “the Fed won’t cut this year,” especially if the …