BNP Paribas chief economist Isabelle Mateos y Lago said the Federal Reserve’s July meeting could remain finely balanced if July nonfarm payrolls come in near or above 130,000. Short-term interest-rate futures currently imply about a 20% probability of a rate hike at the Fed’s July 29 decision, down from 33% before the payrolls report. She also noted that the European Central Bank is expected to raise rates again in September, while still leaving open the possibility of no further tightening. The update highlights how labor-market data continue to shape policy expectations across major central banks.
Fed and ECB rate expectations shift after payrolls signal
According to Jin10, BNP Paribas chief economist Isabelle Mateos y Lago said the Federal Reserve’s upcoming meeting could still be difficult to call if July nonfarm payrolls come in near or above 130,000. In the rates market, short-term interest-rate futures are currently pricing roughly a 20% chance that the Fed will raise rates at its July 29 policy decision. That marks a decline from the 33% probability seen before the payrolls report was released, indicating that recent labor data have altered market expectations for near-term Fed action.
Mateos y Lago also said the European Central Bank is expected to deliver another rate hike in September. At the same time, she did not rule out the possibility that no additional hikes may ultimately be delivered. The comments underscore that monetary policy expectations on both sides of the Atlantic remain data-sensitive, with employment figures and inflation dynamics continuing to drive repricing across macro markets.
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