Source: Reuters —
The Federal Reserve is seen sticking to sharp interest rate hikes in coming months to cool inflation, but rising U.S. unemployment and a slowdown in wage growth has traders betting that borrowing costs next year may not end up quite as high as previously anticipated.
That’s the read from markets after the Labor Department reported Friday that employers added a more-than-expected 315,000 jobs last month, the unemployment rate rose to 3.7% from 3.5% as more workers joined the labor force, and wage growth slowed from its earlier torrid pace.
Traders still expect the Fed to deliver a third 75-basis point rate hike at its Sept 20-21 meeting, lifting the benchmark rate to 3%-3.25%, though they have pared that probability to 60% from 70% before the report, based on the CME Fedwatch tool.
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