A report showing hiring by U.S. employers slowed last month by much more than economists expected sent fear through markets, with both stocks and bond yields dropping sharply. Worries rise that Fed may have kept main rate high too long, needing substantial cut to avert recession.
Traders are now betting on a better than three-in-four chance that the Fed will cut its main interest rate by half a percentage point in September, according to data from CME Group, as economic momentum slows.
"The Fed is seizing defeat from the jaws of victory," said Brian Jacobsen, chief economist at Annex Wealth Management. Economic momentum has slowed so much that a rate cut in September will be too little and too late.
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