Hiring and Wage Growth Push Back Rate Cuts

January’s hiring boom and jump in wage growth further diminish the chances of the Federal Reserve cutting interest rates in the near term. “I think we can officially kiss a March rate cut goodbye, and more than likely a May,” wrote Alex McGrath, chief investment officer for South Carolina-based NorthEnd Private Wealth. While Fed officials now seem to see a potential slowdown in hiring as less critical to their effort to bring down inflation these days, labor data “remains a focus as markets assess when the Fed is likely to start reducing interest rates,” wrote Michelle Cluver, portfolio strategist at Global X. Chair Jerome Powell said Wednesday that the central bank isn’t looking for a significant softening in the labor market or a decline in economic growth at this point as it assesses whether, and when, to lower interest rates.