This can only pile more pressure on the Fed to maintain a hawkish stance on rate policy
02 December 2022
US November payrolls increased more than forecast showing 263k additions versus expectations of 200k while the unemployment rate remains unchanged at 3.7%. So markets should view this as a continuingly strong labour market which seemingly remains unaffected at the moment by higher rates. This can only pile more pressure on the Federal Reserve (Fed) to maintain a hawkish stance on rate policy. Equities down, dollar stronger and treasuries drifting higher in yield – that would be the normal market reaction and at the moment is playing to script but no doubt by the end of the trading day, some will find reason in the report to shift the narrative! Either way, Fed Chair Jerome Powell’s more dovish statement as deduced by markets on Wednesday cannot be seen as that dovish in reality – wage growth and new job creation points to a super-hot employment market and one which the Fed wants to crack with ever higher rate moves.
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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator for the current or future development.