Commerzbank’s Bernd Weidensteiner has highlighted that weaker US employment data for June, along with downward revisions to previous months’ figures, has reduced the pressure on the Federal Reserve to raise interest rates at its late-July meeting [1]. The report notes that the job numbers fell short of expectations, which is likely to halt ongoing discussions about a short-term interest rate hike by the Fed [1].
Additionally, sharply lower oil prices and expectations for easing inflation further support the view that the Federal Reserve will keep the federal funds rate unchanged [1]. Commerzbank continues to forecast that US key interest rates will remain steady through 2026 [1]. According to the analysis, the key data points referenced by Fed Chairman Warsh indicate that there is no support for an interest rate hike at the upcoming meeting [1].
Commerzbank reiterates its assessment that the Federal Reserve will hold rates steady this year, viewing the latest employment data as confirmation of this outlook [1].
CONCLUSION
The latest US jobs data and downward revisions have eased pressure on the Federal Reserve to raise rates in July, with Commerzbank expecting rates to remain unchanged this year. Lower oil prices and anticipated easing inflation further support a steady rate outlook.