How Wall Street firms see US jobless rate shaping Fed rate cut
Sept 6 (Reuters) -The Federal Reserve is widely expected to cut borrowing costs at its upcoming meeting Sept. 17-18 and the strength of the job market is likely to be a deciding factor on whether it delivers a quarter-of-a-percentage-point cut or a bigger half-point cut.
Below is a sampling of Wall Street banks' forecasts for the August employment report along with their expectations for the size of the Fed's rate cut later this month. Banks' baseline forecasts are indicated in ALL CAPITAL LETTERS.
Some banks have also roughed out what they think the Fed could do under a range of possible readings in Friday's labor market report. Fed policy rate forecasts provided under these alternative scenarios are indicated with an *asterisk* in the table.
Overall, economists polled by Reuters estimate the U.S. unemployment rate fell to 4.2% in August, from 4.3% in July, and payrolls rose by 160,000, up from July's 114,000. Employment data will be released 0830 ET (1230 GMT) on Friday.
IF jobless rate is AND | payrolls gain is | Fed will cut by 25 bps | Fed will cut by 50 bps |
|---|---|---|---|
4.2% | <100K | Evercore ISI* | |
4.2% | 100K-124K | Citi* | |
4.2% | 125K-149K | NOMURA EY Evercore ISI* Citi* | Bank of America* |
4.2% | 150K-174K | OXFORD ECONOMICS DEUTSCHE BANK | |
4.2% | 175K-199K | JEFFERIES BARCLAYS MORGAN STANLEY | |
4.2% | 200K plus | TD SECURITIES BANK OF AMERICA | |
4.3% | <125K | Evercore ISI* | |
4.3% | 125K-149K | Bank of America* | CITI Nomura* |
4.3% | 150K-174K | Evercore ISI* ING Economics* | Citi* |
4.3% | 175K-199K | Citi* | |
4.4% | <100 | ING Economics* Bank of America* | |
4.4% | 175K-199K | Evercore ISI* | |
4.4% | 200K plus | Evercore ISI* |
Reporting by Ann Saphir; Editing by Sam Holmes
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
