Friday's jobs report from the US, nonfarm payrolls, was sizzling:
Bond giant Pacific Investment Management Company (PIMCO) has dialed back its forecast for Federal Open Market Committee (FOMC) rate cuts this year. The previous PIMCO projection was for 3, but they've dialled that back to 2 now as thier 'base case'. A PIMCO rep spoke with Reuters after the NFP numbers on Friday:
- this means a little bit less out of the Fed
- the economy is proving for now that it can handle higher rates
Checking FedWatch you'll see the pricing for a June rate cut is now bordering on a coin toss. I reckon the likelihood is closer to 10% than 50%. If you've been following along with my 'no June rate cut for you!' shouting this'll come as no surprise.
FOMC members are piling on the later cut bandwagon:
- Fed's Waller says may need to hold current rate for longer than expected, no rush to cut
- Waller's remarks have pumped up the US dollar
- (ps still is too)
- More Fed's Waller: The economy has supported the cautious approach by the Federal Reserve
- Still more from Fed's Waller: If unemployment goes up no reason to panic
- Fed's Bostic say he now anticipates only one rate cut this year
- If economy continues to be healthy, why would we cut rates
And, I like this reasoning:
FedWatch update:
