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CIBC: Fed On Hold In June But Now See Final July Hike

US OUTLOOK/OPINION
  • CIBC note that the upside surprise in payrolls hiring was in line with the increase in job openings seen leading up to the reference period of this survey.
  • Although there was some weakness beneath the surface of the report, the tone of recent data suggests that the US was still on pace for something close to 2% growth in Q2.
  • The ambiguity in today's data should be sufficient to have the Fed opt to keep rates on hold in June, but we now see them nudging rates up a final time in July.
  • We're near the end of a long rate hike cycle, so each hike is now a separate decision that will rest on the incoming data, and a Q3 slowdown is necessary to still make July an isolated final move rather than part of a sequence.

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