BNP Paribas chief economist Isabelle Mateos y Lago said the Federal Reserve’s upcoming meeting could become far more uncertain if July nonfarm payrolls come in near or above 130,000. Her remarks highlight how labor-market data remains central to policy expectations at a time when rate pricing has already shifted. According to short-term interest rate futures, the probability of a rate hike at the Fed’s July 29 decision is now around 20%, down from 33% before the payrolls report. She also noted that the European Central Bank is still expected to raise rates again in September, although policymakers have not ruled out the possibility of refraining from additional hikes. The comments underscore that both U.S. and eurozone policy paths remain highly data-dependent.
Nonfarm payrolls could reshape expectations for the Fed’s July meeting
According to Jin10, BNP Paribas chief economist Isabelle Mateos y Lago said the Federal Reserve’s upcoming meeting would become far more uncertain if July nonfarm payrolls come in near or above 130,000. Her comment points to the continued importance of labor-market data in shaping near-term monetary policy expectations, especially as investors reassess the likelihood of further tightening.
Rate futures show lower odds of a July hike
Short-term interest rate futures currently imply that the probability of a rate hike at the Federal Reserve’s July 29 policy decision is about 20%, down from 33% before the nonfarm payrolls report was released. The repricing suggests that market confidence in another hike has eased, although a stronger-than-expected employment print could still alter those expectations again.
ECB still expected to move in September, but uncertainty remains
Mateos y Lago also said the European Central Bank is still expected to raise rates again in September, while not fully ruling out the possibility of no additional hikes. That framing suggests the ECB’s next move remains conditional on incoming inflation and growth data, leaving policymakers with flexibility rather than a fully locked-in path.
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