Janet Mui: weekly economic update 5 July

Friday's unexpectedly strong US job data raises questions about when – rather than if – the Fed will make the first cut to rates

05/07/2019
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Authors

Janet Mui
Global Economist, Cazenove Capital
  • Unexpectedly strong US jobs data (published Friday) prompted a dismayed stock market reaction amid fears that the Fed's first rate cut might be further away than previously thought
  • The overall picture is less clear-cut: unemployment ticked up and wage growth disappointed
  • The Federal Open Market Committee (FOMC), which meets again at the end of July, may still view an “insurance” cut of 25 basis points (or 0.25%) as justified in case the economy deteriorates
  • The strong jobs data failed to meaningfully alter the market’s expectation of one rate cut at the July meeting and nearly three rate cuts by the end of 2019

Authors

Janet Mui
Global Economist, Cazenove Capital

Topics

The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.