The solid non-farm payrolls print today and rebound in the stock market has pricing for a June cut down to 40% from as high as 75% last week.
Goldman Sachs is now piling on and pushing their cut fall to the July 30 meeting from June 18. With today’s jobs report, the Fed won’t get another one before the June meeting and that will make it tough to justify a cut, even if the June print is soft (it would just be one number).
From Goldman:
Nonfarm payrolls rose 177k in April, above expectations. Payroll growth was revised down by 43k in March and 15k in February. The three-month average of payroll growth now stands at 155k. The unemployment rate was unchanged on a rounded basis at 4.2%. Our estimate of the underlying pace of job growth based on the payroll and household surveys now stands at 149k. We are pushing back the first fed funds rate cut in our forecast to the July FOMC meeting (vs. June previously), reflecting today’s better-than-expected payrolls report and a better-than-feared April ISM reading yesterday.
This article was written by Adam Button at www.forexlive.com.