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Barclays: Powell's hawkish stance will not be changed by employment data.
On August 15, Barclays Bank stated on Friday that despite the market betting that the Fed may cut interest rates in September, recent U.S. employment data is unlikely to change Fed Chairman Jerome Powell's cautious stance on interest rates. The bank expects only a 25 basis point cut in December this year and believes that investors are overly optimistic about a September rate cut, misunderstanding the Fed's view on the strength of the labor market. Powell recently stated that monetary policy is "only slightly tight" and the labor market is "robust." Even though July's job growth slowed and the unemployment rate is at 4.2%, Barclays has not seen any signs of a change in the stance of hawkish Fed officials. Whether to cut rates in September remains "up in the air," and the bank will focus on speeches at the Jackson Hole meeting for clues.