A macro research report by China Galaxy Securities suggests that despite strong non-farm payrolls data, the Federal Reserve is unlikely to raise interest rates this year. The May labor market data exceeded market expectations, but the Fed lacks sufficient reasons and data to justify a rate cut in the short term. The report indicates that while the labor market remains robust, it does not pose a significant risk of accelerating inflation, reducing the likelihood of a rate hike.
China Galaxy Macro notes that although non-farm payrolls have been strong since March, this trend only raises the threshold for a rate cut rather than increasing pressure for a rate hike. The market's focus on potential interest rate hikes has been a dominant trading theme, but the report argues that the risk of hikes is overestimated. The Federal Reserve is expected to maintain a data-dependent approach, with liquidity expectations potentially recovering later in the year.
China Galaxy Macro: Strong U.S. Jobs Data Unlikely to Prompt Fed Rate Hike
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