Fed to Fast Forward Rate Hikes After Red Hot Jobs Report

Fed to Fast Forward Rate Hikes After Red Hot Jobs Report


The Federal Reserve will likely throw another round of supersized rate hikes at the U.S. economy following the sizzling hot jobs numbers the Department of Labor released Friday.

Up until yesterday, the federal funds futures market implied a 66 percent likelihood that the Fed would raise the current federal funds target rate — now at 2.25-2.50 percent — by another 50 basis points to a range of 2.75 – 3.0 percent. After the news that the U.S. economy added 528,000 jobs in July and the unemployment rate fell to 3.5 percent — much hotter than projections of a cool 258,000 jobs and a steady 3.6 percent unemployment rate — the odds shifted violently.

On Friday, the market implied a 69.5 percent chance that the Fed raises rates 75 basis

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