Broking firm Centrum suggests that the US Federal Reserve is likely to hit the pause button on interest rate hikes in September, providing some relief for the stock markets. This prediction comes as the US experienced a notable increase in its unemployment rate, rising from 3.5% in July to 3.8% in August, signaling a slowdown in the labor market as the impact of higher interest rates begins to permeate the economy.
Centrum Stock Broking stated, “Going by the August jobs data, it is safe to assume that in the September meeting the Fed won’t be raising the rates.” While inflation has largely subsided, the Federal Reserve has remained cautious, citing that recent interest rate increases haven’t caused an uptick in unemployment.
The report also highlights that despite some moderation, the labor market remains relatively stable, with a rise in labor participation, which is viewed as a sign of market normalization. In August, the private sector added 179,000 new jobs, primarily in private education, health, and leisure and hospitality.