Slowing Economy, Soaring Hopes: Fed Rate Hike Odds Plummet Amid Jobs Report

A recent jobs report has sent mixed signals to markets, with some analysts warning of a slowing economy while others see an opportunity for the Federal Reserve to hold off on further rate hikes.

The US labor market lost 23,000 jobs in July, with the public sector shedding 53,000 positions and the private sector adding 30,000. Meanwhile, revisions to May and June employment data showed a net loss of 103,000 jobs.

The data suggests that inflation may also be slowing down, with headline CPI expected to rise just 0.1% in July after falling 0.4% the previous month. Core CPI is forecast to increase by 0.2% month-on-month and slow to 2.5% year-over-year, its lowest level since February.

CME FedWatch puts the odds of a no-September hike at 46%, down from 57% before the jobs data. This has led some investors to bet on a more dovish Fed, with potential benefits for stocks and gold prices.