Commerzbank’s Bernd Weidensteiner notes that weaker US employment data for June and downward revisions to prior months reduce pressure on the Federal Reserve to hike rates at the late-July meeting. With Oil prices sharply lower and inflation expected to ease, Commerzbank continues to forecast that US key interest rates and the federal funds rate will remain unchanged through 2026.

Soft jobs data underpins Fed pause

"Pressure for an interest rate hike at the Fed meeting in late July continues to ease."

"The job numbers, which fell short of expectations, are likely to put an end—for now—to the discussions about a short-term interest rate hike by the Fed that have flared up repeatedly in the meantime."

"Thus, the key data—which, according to Fed Chairman Warsh, market participants should rely on when assessing the trajectory of the federal funds rate—do not support an interest rate hike at the meeting in late July."

"We continue to expect US key interest rates to remain unchanged this year."

"We see this as confirmation of our assessment that the Fed will hold rates steady this year."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)