Rate hikes are over...probably 📉

This weeks trend: Interest Rates 📉

The ADP private payrolls report came out yesterday, and the numbers were way below estimates at 145,000 against 210,000 projected. Unemployment benefits claims were up a bit as well, and the Fed’s favourite inflation measure, PCE, came in lower than expected last week too.

Don’t fall asleep!

There’s a point here, and that is that I’m calling it now, the Fed are going to pause rates at the next FOMC meeting in early May.

They would have done it last month if they could have gotten away with it without the market totally panicking. Now that we’ve got a couple of pieces of data showing things are cooling off, they’ll be gagging to take some of the pressure off the financial sector.

I’m expecting Jerome Powell to announce a pause to the hikes for the next couple of months, and we could even see a rate cute before the end of Summer.

Of course if CPI happens to come in way above expectations (though I don’t think it will), then all that goes out the window. For next month at least.

The UK is a little further behind, with inflation still much higher than in the US. I’d expect to see a number of additional rate hikes until a turnaround in policy from the Bank of England.