Forbes: AI Employment Crisis Fuels Expectations of Fed Rate Cuts

Odaily According to the U.S. February employment report, the economy lost 92,000 jobs, whereas economists had previously forecast an increase of 50,000 jobs. Isaac Stell, an investment manager at Wealth Club, stated that the Federal Reserve is currently facing more complex policy challenges, with rising oil prices following U.S. strikes on Iran exacerbating inflation concerns. Goldman Sachs analysts predict that oil prices could break through $100 per barrel, while JPMorgan researchers warn that prices could reach $120 per barrel.

Data from the CME FedWatch tool shows that traders are currently pricing in a nearly 50% probability of a Fed rate cut in June. Amid the decline in employment, Oracle and Block have successively announced layoffs. Block CEO Jack Dorsey attributed the planned 40% staff reduction to the AI transformation, stating that smaller teams can accomplish more work with the help of AI tools. Amazon has also announced layoff plans.

Brad Conger, Chief Investment Officer at Hirtle Callaghan, commented that the February employment report continues the trend of labor market weakness observed since last year. The 40% layoffs at Block signal job redundancy in the economy. AI is not replacing jobs; rather, the layoffs are funding AI expenditures.