Time to cut rates? What will the week bring?

The first Friday of the month is behind us, which means that last week investors focused on the condition of the American labor market. Although ultimately the change in employment in the non-agricultural sector turned out to be greater than forecast, the fewer and fewer available vacancies indicate that the trend of employment growth in the USA is coming to an end.

So what to expect from the Fed and is it time to cut rates?

The relationship between values NFP reports and JOLTs remains quite low - despite the unprecedented increase in the number of new job offers immediately after the pandemic. The recent cooling of the situation on the American labor market can therefore be considered a "return to normality", although the dynamics of declines in some indicators may indeed be disturbing.

The unemployment rate, which is finally starting to rebound, has risen to 3,8%. This took place just after the end of the Jackson symposium, which, combined with slightly hawkish comments from members Fed became a pretext for forecasting the end of the cycle of rate increases in the United States. Although officially no such announcement was made - the market at the end of last week was clearly considering such a scenario. And this despite the analytical mish-mash of macroeconomic data coming to us from the United States.

In the euro zone, inflation remains unchanged, which may be a tough nut to crack for the ECB. However, market rumors say that the latest projections EBC are intended to show progress towards the target within the forecast period at current rates. What will the Monetary Policy Council do in such a case and is it really time to cut rates?

In today's webinar:

• What is happening to the American labor market?
• Will the ECB refrain from further rate increases?
• Will the MPC cut interest rates?

About the host

Dr Przemysław Kwiecień - Chief economist X-Trade Brokers. Doctor of Economics at the University of Warsaw, graduate of the University of Warsaw and London Metropolitan University (MSc). Holder of the prestigious CFA certificate. He has been working for XTB since 2007, previously he gained experience as an advisor to the Minister of Finance, Mirosław Gronicki, and an economist at Bank Millennium. At XTB, he manages the Analysis Department.

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