The key measure of the U.S. job market has reached an inflection point, with job vacancies now back to pre-pandemic levels. This is suggesting a potential increase in the unemployment rate which may lead to a 50 basis points (bps) Fed rate cut.
The Fed has said that reducing job openings could theoretically rebalance the labor market without significantly increasing unemployment. However, that does not look to be playing out as expected.
As a result, traders have been adjusting expectations for a larger rate cut in September, influenced by this recent job market data and Fed statements.
#EyeOnVolatility
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