Arab Today, arab today to keep feds hand off ratehike button
Last Updated : GMT 20:05:56
Arab Today, arab today
Arab Today, arab today

US jobs slowdown

To keep Fed's hand off rate-hike button

Arab Today, arab today

Arab Today, arab today To keep Fed's hand off rate-hike button

Analysts say the dismal May jobs report
Washington - Arab Today

The unexpected downturn in the US jobs market has once again removed an interest rate hike from the table as the Federal Reserve meets on monetary policy this week.

Analysts say the dismal May jobs report released on June 3, the worst in almost six years, and still-weak inflation will stay the hand of the Federal Open Market Committee, despite strong expectations just three weeks ago that a hike was coming this month or next.

Even Fed Chair Janet Yellen had said on May 27 that an increase in the benchmark federal funds rate, currently at an ultra-low 0.25-0.50 percent, was likely "appropriate" at the FOMC's June or July meeting.

That echoed what several other Fed officials had been saying, and while most of the focus was on the end-July meeting, many thought the June 14-15 meeting was also a real possibility.

Instead, the jobs report showing that just 38,000 new positions were added in May, only one-quarter of what was expected, changed the whole picture. Yellen called it "concerning" and, while insisting she was still confident in steady US economic growth this year, abandoned any calendar reference for a rate increase.

"Given the disappointing employment report for May, the Fed is expected to delay a rate hike until September -- assuming that the recent weakness in job growth is temporary," said IHS Global Insight in a client note Friday.

- Weak inflation, Brexit -

"One should never attach too much significance to any single monthly report," Yellen said on June 6, adding that the overall labor market situation has been "quite positive".

But on top of that are more uncertainties ahead. There is the general picture of slower world economic activity: The World Bank just slashed its global growth outlook for this year to 2.4 percent from 2.9 percent.

And inflation, which the Fed wants to see pick up as a sign of firm growth, is weakening even as one key element, the price of oil, is rising. 

Inflation expectations, as signaled by the markets, have been falling rather than rising.

"The Fed had until recently taken solace in the stability of inflation expectations. Therefore, the downturn in the latter will not go unnoticed by the FOMC at its meeting next week," said Deutsche Bank in an analysis.

In addition, markets are increasingly worried that the British will vote in favor of exiting the European Union in a referendum on June 23, a week after the FOMC meeting. 

Many leading finance officials around the world, including Yellen herself, have warned of turbulence in markets and possible slower growth if Britain goes ahead with Brexit.

"A UK vote to exit the European Union could have significant economic repercussions," Yellen said. 

Carl Weinberg, chief US economist at High Frequency Economics, said that the mere idea that an EU member has gone this far in weighing an exit "has cracked the foundation of Project Europe."

"The whole challenge is that no one can draw upon experience, or even logic, to predict what will happen," he said.

The FOMC will announce its rate decision along with new forecasts for growth and inflation at the end of the meeting on Wednesday, and Yellen is scheduled to explain the decision and the Fed's outlook in a press conference afterward.

While some analysts say a quick turnaround in the data could make July a possibility for a rate increase, CME fed funds futures contracts gave that a 20 percent possibility, and September only a 35 percent possibility.

Most views were that it would only come in December, with Deutsche Bank saying stubbornly low inflation would likely put off any more tightening to next year.

Source: AFP

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today to keep feds hand off ratehike button Arab Today, arab today to keep feds hand off ratehike button

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today to keep feds hand off ratehike button Arab Today, arab today to keep feds hand off ratehike button

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today Ryanair's O'Leary: Could ground more planes

GMT 06:49 2017 Friday ,22 September

Ryanair's O'Leary: Could ground more planes
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Huthis stage defiant rally 3 years

GMT 05:29 2017 Friday ,22 September

Huthis stage defiant rally 3 years
Arab Today, arab today Saudi Arabia to unblock internet calling apps

GMT 11:31 2017 Wednesday ,20 September

Saudi Arabia to unblock internet calling apps
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Ministry seeks to improve education

GMT 14:49 2017 Sunday ,17 September

Ministry seeks to improve education
Arab Today, arab today All eyes on May as she prepares

GMT 10:16 2017 Friday ,22 September

All eyes on May as she prepares
Arab Today, arab today Puerto Rico, Virgin Islands brace

GMT 12:01 2017 Wednesday ,20 September

Puerto Rico, Virgin Islands brace
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes pumps 1 bln euros    

GMT 06:04 2017 Friday ,22 September

Mercedes pumps 1 bln euros    
Arab Today, arab today Intel chips loaded in Waymo

GMT 14:43 2017 Wednesday ,20 September

Intel chips loaded in Waymo
Arab Today, arab today Youssra prepares for launching her  program

GMT 08:59 2017 Wednesday ,20 September

Youssra prepares for launching her program
Arab Today, arab today France hopeful of persuading Trump

GMT 06:21 2017 Wednesday ,20 September

France hopeful of persuading Trump

GMT 09:40 2017 Tuesday ,19 September

Actress Ream Hhagag prepares for a new film

GMT 18:09 2017 Thursday ,21 September

China lifts 10-year travel ban

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 19:18 2017 Monday ,18 September

5,000 'Dieselgate' deaths in Europe per year

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 18:03 2017 Thursday ,21 September

Alarm over flesh-eating ulcer cases

GMT 07:00 2017 Wednesday ,20 September

A no-frills business success

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 12:46 2017 Thursday ,21 September

Google likely to buy stake in Taiwan smartphone maker HTC

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday