Bank of America: Friday's non-farm payrolls data may not be a decisive factor for interest rate hikes, and the bank still expects a September rate hike.
6 days ago
Amid recent sharp volatility in the bond market, investors are awaiting two key U.S. data releases that could influence Federal Reserve policy decisions: the August non-farm payrolls report due this Friday, and August CPI data to be published on September 11. However, Bank of America (BofA) believes these two metrics carry different weights for the Fed’s September 15-16 policy meeting. The bank describes the non-farm payrolls report as more of an "appetizer," while the "main course" that will truly determine whether the Fed raises interest rates remains CPI. BofA analysts stated on Wednesday: "Non-farm payrolls are unlikely to be a decisive factor for a September rate hike. A significantly weak report could lower the probability of a rate hike, but CPI remains the key data point that will decide whether the Fed follows through on a rate hike. We maintain our call for a September rate hike." Unless the upcoming non-farm payrolls data shows a clear downside surprise, the jobs report is unlikely to be the final determining factor in the September FOMC meeting. The bank particularly emphasized that inflation remains the Fed’s primary concern at present.
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