The latest labor market data has caused concern among investors, with fewer new jobs added in April than expected. This, combined with the weaker job growth and increase in unemployment rate, suggests a potential economic slowdown. Speculation about a possible interest rate cut by the Federal Reserve has been fueled by these concerns, but Fed Chairman Jerome Powell has indicated that interest rates will remain unchanged for now.
The financial markets are uncertain about when the Fed might cut interest rates, with some predicting a decrease in September. However, the current economic indicators do not point to an imminent downturn. Despite this uncertainty, experts advise investors to adopt a defensive investment strategy and reduce risks in their portfolios. Thomas Stucki from St. Galler Kantonalbank does not see a recession as likely at this point, but warns that the Fed’s decisions on interest rates are closely watched.
Investors are also concerned about inflation and its potential impact on the stock markets. While there are concerns about this issue, experts believe that it is unlikely to lead to a recession at this time. The Swiss National Bank has already made cuts in interest rates and their impact on the Swiss stock market has been minimal so far. Stucki expects further cuts by the SNB later this year but the overall outlook remains uncertain.
Fed’s decisions on interest rates are closely monitored especially before upcoming elections. While Powell has stressed that election campaign will not influence their decisions, investors need to keep an eye on how central bank manages monetary policy and its impact on political landscape.
Overall, while there is uncertainty surrounding the American labor market figures and their potential impact on