US Employment Data Draws Attention Amid Market Uncertainty
A mix of risk factors has injected uncertainty into markets. Concerns about potential military confrontations between the US and Iran remain prominent. Recent reports indicate that the US downed an Iranian drone, while Iran is said to have intercepted a US-flagged tanker in the Strait of Hormuz.
Domestically, the US recently ended a four-day partial federal government shutdown. Full operations resumed after the House of Representatives passed a budget package, which was signed into law by President Donald Trump.
The partial shutdown caused a delay in Tuesday’s non-farm payrolls report, directing investor focus instead toward the ADP private sector employment data set to be released on Wednesday. Analysts expect the private sector figures to influence the Fed’s next policy moves, while money markets currently anticipate that interest rates will remain unchanged until June.
Richmond Fed President Tom Barkin noted that last year’s rate reductions helped stabilize the labor market and emphasized that the central bank’s next priority should be returning inflation to its target range.
Trump’s nominee for Federal Reserve Chair, Kevin Warsh, has expressed the view that interest rates are not the Fed’s only policy tool. Warsh, who served on the Fed Board of Governors from 2006 to 2011, also played a role in negotiations during the 2008 financial crisis.
Additionally, the US Treasury Department is expected to announce its three-month borrowing program on Wednesday, adding another key factor for investors to monitor.
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