Cowen: Fed Should Raise Rates Amid Strong Jobs Data

Crypto analyst Benjamin Cowen believes that the Federal Reserve 'really should' raise interest rates at its September 16 decision, following a strong jobs report that has pushed rate hike odds back to 60%.

The August jobs print reversed the sentiment expressed by Fed Governor Waller just days before, Cowen noted. With only two weeks left before the decision, market expectations are unusually uncertain, typically settling at 80-90% certainty within one to two weeks of a Fed decision.

Cowen makes his case for a rate hike based on four factors: GDP tracking at 4.7% for Q3 according to the Atlanta Fed, inflation still running at 3.3-3.4% year-over-year, a resilient labor market, and oil prices near $90 a barrel adding fresh inflationary pressure.

Cowen thinks that if the Fed does not raise rates, the bond market will likely read it as a mistake and push long-end yields even higher.