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.