Last week, Fed Chair Jerome Powell hinted the U.S central bank is now finished with its most aggressive tightening cycle in four decades after it held off on raising interest rates for a second consecutive policy meeting.
Those odds increased after Fridays U.S employment report revealed that the labour market is finally cooling.
U.S Nonfarm payrolls increased 150,000 in October – less than forecast and barely half of September’s revised figure of 297,000. Meanwhile the unemployment rate climbed to a two-year high of 3.9% – indicating that employers’ strong demand for workers is beginning to slow.
Labour market numbers are always the last thing to turn in an economic cycle – so the softening in employment and the rise in the unemployment rate makes it all the more likely that the Federal Reserve won’t hike interest rates again.
Traders Eagerly Await FOMC Officials’ Speeches for Clues on Fed’s Plans
With a host of FOMC officials including Jerome Powell due to speak over the next few days – traders will be scrutinizing every word for fresh clues into the central banks future monetary policy plans and most importantly, confirmation that the Fed is finally done hiking.
One of the biggest beneficiaries of the current macroeconomic backdrop has undoubtedly been Gold. The precious metal rocketed above $2,000 an ounce within minutes of the U.S employment figures being released and closed out the week only 4% away from its 2020 all-time highs.
