Investors eagerly awaited the latest hiring data in light of the ongoing uncertainty regarding the Fed’s policy path. Fed Chairman Jerome Powell has often cited the tightening of the labor market as the central bank has made a series of interest rate hikes over the past year. The market is pricing in a 69% probability that the Fed will make another quarter-percent rate hike at its next policy meeting in May 2-3, according to CME Group’s FedWatch tool.Investors see just a 31% chance the Fed will halt its tightening campaign.
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The Fed raised rates by a quarter of a point last month, signaling its determination to curb inflation despite weakness in the US banking sector. Inflation is still abnormally high, with prices jumping 6% year-on-year in February, according to last month’s Consumer Price Index. Powell and other experts suggested that the crisis in the banks could lead to a tightening of credit conditions that would further cool prices.