Trump vs. the Fed: Jobs Report Fuels Rate Hike Expectations Ahead of September Meeting
A strong US jobs report has heightened expectations of a Federal Reserve interest-rate hike at its September 15-16 meeting, amidst pressure from President Donald Trump to cut rates.
The report showed nonfarm payrolls increased by 162,000 in August, with the labor-force participation rate up to 61.6%. The unemployment rate among Black Americans fell to 6% in August after rising to nearly 8% last autumn.
Federal Reserve Chair Kevin Warsh has come under pressure from both sides: raising rates could intensify his confrontation with the president, while refraining from doing so could call into question the consistency of Warsh's own recent hawkish statements.
The final decision will depend largely on next week's consumer and producer price data. If inflation continues to slow, the Fed may leave rates unchanged. However, excessively high figures would strengthen the case for a hike.