Barclays: Powell’s Hawkish Stance Unlikely to Be Swayed by Employment Data

According to ChainCatcher, Barclays Bank stated on Friday that despite market bets on a possible Federal Reserve rate cut in September, recent U.S. employment data is unlikely to change Fed Chair Jerome Powell’s cautious stance on interest rates. The bank expects only a 25 basis point rate cut in December this year and believes investors are overly optimistic about a September cut, misunderstanding the Fed’s view of the labor market’s strength.

Powell recently remarked that monetary policy is “only slightly restrictive” and the labor market is “robust.” Even if job growth slows in July and the unemployment rate reaches 4.2%, Barclays still sees no sign of a shift in the hawkish stance among Fed officials. Whether rates will be cut in September remains “undecided,” and the bank will look to speeches at the Jackson Hole symposium for further clues.