Expectations for a June/July Fed Rate Hike Plummet, Following Disappointing Jobs Numbers

Let’s wrap up this morning’s Fed and jobs report drama with one little blog post.

Coming into these jobs numbers, markets expected a July Fed rate hike, at least at a 58% chance of it happening. The June hike, in spite of all the Fed’s jawboning, was never priced into stocks.

The numbers came in very light, at 38k v 160k, likely because we’re entering into the teeth of a deleterious recession.

Now, the expectations for a June hike are at a clown car 4% and just 42% for July. This puts people like Charlie Evans, who said this morning the Fed should hike twice in 2016 in a bad spot. If the Fed opts to hike in June or July, it will be against the will of the market, something that should not go over very well for equity longs.