For the second-straight May, jobs growth disappointed. Even after May jobs rose by just 138,000, compared with pre-report estimates for 185,000, Fed funds futures still showed a nearly 90% chance of a rate hike at the June 13-14 Fed meeting. Odds of a rate hike by the September meeting are less than 25%, but about 45% by year-end, futures prices indicate. It’s a contrast from 2016, when a weak May jobs report led in part to the Fed’s decision to put off a rate hike. Now some analysts think the Fed might start addressing its balance sheet this fall, perhaps instead of an autumn rate hike.

Source: Forbes June 03, 2017 09:00 UTC