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El-Erian Warns Fed After Jobs Data: ‘Inflation Is Not Dead’ Mohamed El-Erian says the Federal Reserve needs to renew its focus on its fight against rising prices after September’s surprisingly hot jobs report served as a reminder that “inflation is not dead.” - His comments came after Friday’s numbers blew away estimates, triggering a jump in US stocks and bond yields. Nonfarm payrolls rose by 254,000 in September, the most in six months. - “This is not just a solid labor market, but if you take these numbers at face value, it’s a strong labor market late in the cycle,” El-Erian, the president of Queens’ College, Cambridge, told Bloomberg Television on Friday. - “For the Fed, it means push back much harder against pressure from the markets to put you in the single mandate box,” he added. “Enough talk about, ‘The Fed should only be concerned about maximum employment.’” https://lnkd.in/gMr2CArg

Strong job growth and low unemployment signal the Fed may limit rate cuts in 2025, keeping borrowing costs higher for longer - especially with Trump re-entering the political landscape. How are you preparing for this challenging economic environment?

🔍 How the August Jobs Report Could Shape the Fed's Next Move 📊 The Federal Reserve’s next interest rate decision is set to be influenced heavily by the August jobs report. Key factors like wage growth, unemployment, and labor force participation are in focus. Will we see a rate cut, or will stronger data lead to restraint? Discover what to expect and how it might affect markets in our latest analysis. 👉 Read the full article: https://lnkd.in/gqNrSEtS #FederalReserve #InterestRates #EconomicOutlook #JobsReport #Finance #MarketAnalysis #xlearnonline #Investing #EconomicTrends

At first glance, the magnitude of the difference between the report of jobs added and consensus was a bit shocking, At the same time, the increase in unemployment was also bigger than expected, triggering renewed fear of recession, notes Melissa Brown, Managing Director of Investment Decision Research at SimCorp. "Overall, however, the unemployment rate is still at an average level, and we've seen a lower magnitude of monthly jobs created in the past year without triggering recession fears. The next inflation reports will be important to see if wage growth, slightly lower than expected in today's report, has kept up. And for those who believe this month's report was a signal that a recession is nigh, I would remind them that the yield curve, another powerful signal, has been inverted for a couple years. Perhaps the dislocations from the Covid crisis have rendered some reliable signals less reliable in the current economy,” Melissa tells Kiplinger's Dan Burrows. https://lnkd.in/dmzhMsiR

The US economy in December added the most jobs since March and the unemployment rate unexpectedly fell, capping a surprisingly strong year and supporting the case for a pause in Federal Reserve interest-rate cuts. https://lnkd.in/gMBGEg45 #InterestRates #FederalReserve #UnemploymentRate

"The labour market has certainly shown steady signs of cooling in the past few months. The question for the Fed (and markets), is whether this is a normalisation to pre-Covid trends or the start of a more significant weakening." George Curtis, Portfolio Management at TwentyFour Asset Management LLP breaks down the indicators which can be looked at to understand the dynamics at play; including job openings data, unemployment data and jobless claims. In his view, if the steady cooling continues it is likely the Fed will look to start cutting rates later this year. Read more: https://bit.ly/3La0m4h #labourmarket #inflation

This is a big week for economic events, headlined by the Federal Reserve meeting and Chairman Jerome Powell's news conference. No rate move is expected this time, but the central bank is expected to set the stage for a possible rate cut in September. The other star of the economic calendar show is the July employment report. In contrast to the hot weather around much of the nation, the job market is cooling. Payrolls are expected to notch the second sub-200k monthly total this year, while the nation's unemployment rate likely held steady at 4.1%. (See graph below showing unemployment since 2019). While the normalizing job market also means that workers don't have the pull with current or prospective employers that they enjoyed in recent years, Fed Chairman Powell says the market appears to be back in balance. Coinciding with that is less inflation pressure. And that, in turn, helps to make the case for a widely expected interest rate reduction as early as September.

US unemployment rate rises again to 4.3%, unexpectedly! The unemployment rate in July was 4.3%, much higher than the expected 4.1%. Interest rates will definitely be cut in September, possibly by 0.5%. The global interest rate cut cycle has finally begun. #interestrate

The Federal Reserve is unlikely to reduce interest rates in the near term. While inflation has decreased from its peak, it remains above the Fed's 2% target, prompting the central bank to keep rates elevated to continue controlling prices. Additionally, the strong labor market may create wage pressures, potentially driving inflation higher if rates are cut. Despite ongoing economic growth, the Fed prefers to act cautiously, avoiding the risk of overheating the economy. Global uncertainties, such as geopolitical tensions and commodity price volatility, also increase the risks of making premature decisions. For these reasons, the Fed is likely to maintain its restrictive policy until there are more tangible improvements in inflation. So, from my point of view, the Fed will remain cautious and won't lower interest rates until more stable and controlled economic conditions are achieved. https://lnkd.in/dp8vGnkV

With the latest data just released a few minutes ago showing the US inflation rate slowing to 2.5 per cent, conditions in America’s labour market remain all-important for the 25 vs 50 basis point rate cut debate facing the Federal Reserve next week.  So, taking Jay Powell’s advice to look at the “totality of data”, we pulled out six charts that help put last week’s NFP numbers in context.