Stocks are soaring as traders still see Fed on hold in June after blowout payrolls report

A blowout surge in May nonfarm payrolls isn’t denting expectations among fed-funds futures traders for policy makers to leave rates on hold this month — and that’s helping stocks rally sharply on Friday.

Fed-funds futures traders priced in a 27.6% probability the Federal Reserve will lift its key rate by 25 basis points at its June 13-14 policy meeting, according to the CME FedWatch tool. That’s up from 20.4% on Thursday, but down from 64.2% a week ago. See: ‘The upshot is that the Fed can still afford to skip a rate hike in June’ — economists react to May jobs report

“ On the other hand, the stock market seems unstoppable, the job market is very strong and inflation is down from the highs, but doesn’t appear to be on a sustainable path to their 2% target,” he said.

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A June skip jumps to the fore following latest Fed commentsFederal Reserve officials including the vice chair-designate pointed towards a rate hike 'skip' in June, prompting a quick reversal of market expectations for another hike as the U.S. central bank weighed the value of caution against still strong inflation data.
Source: Reuters - 🏆 2. / 97 Read more »