BNP Paribas chief economist Isabelle Mateos y Lago said the Federal Reserve’s July meeting could become far more uncertain if US nonfarm payrolls for July come in near or above 130,000. In rate markets, short-term interest rate futures currently imply about a 20% probability of a Fed hike at the July 29 decision, down from 33% before the payrolls release. The shift suggests traders have moderated expectations for further tightening, even as labor-market data remains a key catalyst for repricing. Mateos y Lago also said the European Central Bank is still expected to raise rates again in September, while leaving open the possibility that no additional increase may ultimately be delivered. Together, the comments highlight how both the Fed and the ECB remain data-dependent, with upcoming labor and inflation signals likely to shape cross-asset pricing and broader macro sentiment.
July payrolls may be decisive for the Fed’s next meeting
According to Jin10, citing comments from BNP Paribas chief economist Isabelle Mateos y Lago, the Federal Reserve’s upcoming meeting could become much more uncertain if US nonfarm payrolls for July come in near or above 130,000. Her remarks underscore that labor-market data remains one of the most closely watched inputs for policy pricing, especially at a time when the direction of the next move is not fully settled.
Futures market shows softer odds of another rate hike
Short-term interest rate futures currently price the probability of a Fed rate hike at the July 29 policy decision at around 20%. That is lower than the 33% level seen before the payrolls report was released. The decline suggests that traders have scaled back expectations for additional tightening, even though employment data continues to play a central role in shaping macro positioning across markets.
ECB still leans toward a September hike, but without certainty
Mateos y Lago also said the European Central Bank is expected to raise rates again in September. At the same time, she did not rule out the possibility that no further hike may be delivered. The comments reflect the broader reality facing major central banks: policy decisions remain highly dependent on incoming data, with inflation, growth, and labor conditions all feeding into the final rate path.
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