Strong US employment, Likelihood of Fed's interest rate freeze stance increase

Federal Reserve Observing The Employment Market (Source: Forbes)

As the April U.S. employment market shows a more stable trend than expected, the possibility of the Federal Reserve (Fed) freezing rates for the time being is increasing. Nick Timiraos of The Wall Street Journal (WSJ) reported that "April employment data does not show the level of slowdown desired by the Fed," predicting that the interest rate freeze trend will be maintained at the upcoming Federal Open Market Committee (FOMC) meeting next week.

Nick Timiraos is considered a figure reflecting the internal intentions of the Fed, so his analysis is effectively regarded as a message from the Fed by the market. He emphasized that "unless the unemployment rate rises noticeably, there is no reason for the Fed to carry out a rate cut."

Walter Bloomberg also analyzed that "the Fed remains focused on the goal of controlling inflation," and "if the signals of an employment slowdown are not clear, maintaining the current level is a more reasonable choice than a rate cut." In fact, during the June meeting, no signals of a rate cut have emerged, and the outlook that maintaining the current observation stance is highly likely is prevalent.