Traders in the fed futures market raised the odds of four rate hikes to 38% after the jobs report. In the wake of the market turmoil over the political situation in Italy, those odds had fallen below 20%. Anderson said he thought the odds of a fourth hike this year were 50-50 but he was sticking with his baseline of three moves. The threat of a trade was a gray cloud over the outlook, he said.
Strong jobs report doesn’t guarantee four Fed interest rate hikes this year
The May employment report was seen as strong across the board and certainly prompts the Federal Reserve to raise interest rates in 12 days, but it doesn’t settle the larger debate over whether there will be three or four total moves this year. “It certainly gives them the green light to go in June,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “And it raises the odds they go four rather than three this year,”
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