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Weaker job market could pave the way for Fed rate cuts
MarketWatch cites 22V’s view that benign wage inflation and a cooling labor market increase the odds of lower interest rates.
The U.S. economy is showing signs of job shedding, and MarketWatch argues the development could be positive for stocks if it changes the Federal Reserve’s interest rate outlook.
The outlet, citing 22V, links a weaker labor market with the possibility that the Fed can cut rates, pointing to wage inflation that is described as relatively benign.
In that framework, slower employment growth would reduce the pressure to keep policy rates restrictive, while contained wage growth helps keep inflation concerns in check, according to the same analysis cited by MarketWatch.