© Reuters.
Investing.com – Just two days after Powell’s speech on the possibility of a downtrend, now unexpected data on the US labor market confuses all accounts, providing an overview of the .
The jobs data has now been released above experts’ expectations, indicating that the economy is still in good health, which motivates the Fed to tighten more in the coming period, or at least to rethink the matter again interest rate reduction and rate hikes, as the employment report is one of the favorite indicators followed by the US Federal Reserve.
For the month of November, while experts predicted an addition of only 200 thousand.
While 221,000 jobs, and expectations were to add only 190,000.
It recorded a 5.1% increase, while experts had expected a rise of only 4.6%.
On the other hand, it rose by 3.7%, while experts expected it to also rise to 3.7%, meaning it was in line with experts’ expectations.
Powell’s observations
The Federal Reserve chairman said the tapering trend is likely in the coming period as the battle against inflation improves.
Jerome Powell said in a speech at a Brookings Institution event yesterday that the Fed is able to ease interest rate hikes soon.
While the Fed chairman stressed that monetary policy is likely to remain tight for a while, until there are clear signs of slowing inflation.
Jerome Powell said that policy moves like raising interest rates and reducing bond holdings take time to show their effects on the economy.
Powell added, “It makes sense to ease the pace of rate hikes as we get closer to the level needed to control inflation, and the time to adjust the pace of rate hikes may come at the December meeting.”
The Federal Reserve will continue its efforts… a tougher policy
John Williams, a member of the US Federal Reserve, said last night on Thursday that the US Federal Reserve will continue its efforts for further rate hikes.
“Inflation is still very high,” Williams said, “It will take a few years for the inflation rate to come down to the required level.” He stressed that the US Federal Reserve’s work revolves around balancing supply and demand.
He further said: “The emergence of indications that inflation rates are declining is a welcome matter, noting that inflation cannot be said to have reached a peak level, as the volume of demand still exceeds the volume of making a large difference in the US economy and achieving economic equilibrium requires the application of a tighter monetary policy”.
He said that determining the pace of interest rate hike depends on the US economy in the coming period.
Another confirmation… We still have further monetary tightening ahead of us
Speaking Thursday evening, US Federal Reserve monetary policy chief Michael Barr echoed comments from his colleague John Williams.
Michael said: “Inflation is still very high, but I think we are at the point where we can start to focus on the final rate at which the Bank will stop raising rates, and focus less on the pace of the tightening.
He also said that it is now obvious to start easing the pace of monetary tightening and that the US Federal Reserve may ease the pace at its next meeting.
He also said, “The Fed’s goal is to get inflation to 2%. Most Fed members now see Fed policy in one narrow area.”
He warned that the US Federal Reserve still needs to tighten monetary policy this year and next. He expected to raise prices by 50 basis points at the next meeting.
Barr said, “It is a misconception that reducing the pace of interest rate hikes does not mean a change in the US Federal Reserve’s commitment to the 2% inflation target.” “The US Federal Reserve should keep rates pegged for a long time and not consider cutting interest rates.”
markets now
gold now
The US dollar has fallen sharply during the current moments, to levels near $1784 an ounce, down 1%.
On the other hand, futures contracts for the yellow metal also fell in these moments of today’s trading by the equivalent of 1%, falling to levels close to 1,797 dollars an ounce.
dollar now
It has rallied in the current moments, taking advantage of now-released US labor market data that supports the Fed’s plans for further tightening.
The dollar index has now recorded levels of 105,340, up about 0.7%.
Tie now
While the 10-year yield climbed about 2.5% to a record high of 3.614%.
oil now
While oil did not benefit much from the data, as US Nymex light crude was up 0.4% to $81.7 a barrel.
Instead, it soared to $88 levels, by 0.4%, during these trading moments today.
