No signs of Fed pivot in the latest employment report

The US economy added more jobs than expected pushing the unemployment rate back to 3.5%.

The US labour market, while cooling, remains in a strong position as the demand for workers continues to outpace the supply of workers. There are currently c. 1.7 jobs available for each person looking for a job. This will likely continue to put pressure on wages.

A 75bp rate increase in November seems a done deal at this stage, unless we start to get some more encouraging news from the inflation reports. That seems unlikely at this stage given how sticky inflation has become, but we shall see. Next week all eyes will be on the CPI report.

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Bond Vigilantes

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