Jobless rate rises to 4.2%, reducing odds of Fed easing this month
Federal Reserve officials have signaled that they are in no rush to raise interest rates following recent weak employment data. Traders have significantly reduced their expectations for a rate hike this month as policymakers prioritize gathering more economic information.
Why it matters
This shift in monetary policy expectations directly impacts borrowing costs, mortgage rates, and overall market stability in the United States.
Federal Reserve Vice Chair Philip Jefferson said a decision on whether to increase the benchmark interest rate “may take more time.”
T he weak employment data and recent comments from Federal Reserve policymakers prompted traders in interest rate futures to reduce the odds that the central bank will raise the main interest rate this month to 23% from 64% a week ago, according to CME Group’s FedWatch tool.
Two leading central bank officials, Fed Vice Chair Philip Jefferson and New York Fed President John Williams, signaled that policymakers are in no rush to raise borrowing costs.
Jefferson on Thursday noted that bond yields have increased since policymakers on Sept. 18 raised the federal funds rate for the first time in three years with the aim of slowing inflation to their 2% goal.
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