Bank of America (NYSE:BAC) Securities reiterated its forecast that the Federal Reserve will not cut interest rates in 2025, even as bets on a potential rate cut at the central bank's September meeting increased following last week's weak labor market data.
Last week, figures from the Bureau of Labor Statistics showed that the United States added fewer jobs than expected in July.
However, most of the reaction to Friday's report centered on the large downward revisions to the June and May figures, which suggested that the economy's resilience since President Donald Trump announced higher "reciprocal" tariffs on April 2 was not as strong as it had appeared.
Following the jobs report, markets are now broadly pricing in a rate cut at the conclusion of the Fed's September 16-17 meeting. According to the CME's FedWatch tool, the odds of a quarter-point cut at the meeting now stand at about 80%
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