Fed expected to extend rate-cut pause following December employment report
U.S. Unemployment Rate Declines, Impacting Federal Reserve Policy Outlook
The recent decrease in the U.S. unemployment rate could help ease the Federal Reserve's worries about a weakening job market. With the rate dropping to 4.4% in December from November’s adjusted figure of 4.5%, the Labor Department announced that employers added 50,000 new positions last month. This hiring pace fell short of the 60,000 jobs anticipated by economists surveyed by Reuters.
Many traders now believe that Federal Reserve Chair Jerome Powell has likely overseen his final interest rate reduction before his term concludes in May. Any future decisions regarding monetary policy are expected to be determined by whoever President Donald Trump appoints as Powell’s replacement.
Powell has played a significant role in steering the central bank toward recent rate cuts, but the latest employment data suggests the Fed may hold off on further easing for now.
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