Traders see a 77% chance of a rate cut at the September meeting, up
from 65% recorded a week ago. The easing of US (US) labor market strength has
led to expectations that the Fed will move towards a normalization of monetary
policy in September. The unemployment rate rose to its highest level in more
than two years and average hourly earnings declined as expected in June,
indicating moderating labor market conditions.
Meanwhile, Powell acknowledged at the European Central Bank (ECB)
forum that the Fed has made little progress on inflation and that recent data
shows that the process of deflation has resumed. Hence, for further clarity on
deflating inflation, investors will be focusing on the U.S. Consumer Price
Index (CPI) report for June to be released on Thursday. Despite the key CPI
data, which does not include volatile food and energy prices, it is steadily
rising, while inflation is expected to slow overall.
Dr. Kamaran Qader Yaqub,
Financial Consultant at Investment Spot
company.
