The US Federal Reserve, the right hand of Goldman Sachs and Wall Street, has raised interest rates for the third time in six months even though key economic indicators like non farm payroll jobs are tanking.
“The US Federal Reserve has raised its key interest rate for the third time in six months, providing its latest vote of confidence in a slow-growing but durable economy.
Officials also announced plans to start gradually paring its bond holdings later this year, which could cause long-term rates to rise.
The Fed’s announcement that it would begin paring its balance sheet later this year — “provided that the economy evolves broadly as anticipated” — involves its enormous portfolio of Treasury and mortgage bonds.”
May non-farm payroll
The US May jobs report indicated weak improvement in the US labor market. May non-farm payroll employment in the United States (SPY) (SPXL) posted an improvement of only 138,000 jobs for the month, as compared to 211,000 jobs in April—far below the market expectation of 185,000 jobs added.
The weaker growth in the US labor market in May has now become an increasing area of concern in the overall US economy. The US Manufacturing PMI has also been showing a gradual decline in performance, and the mounting delays among President Donald Trump’s policies are creating more worries in investors’ minds.