Santander Bank: Despite Weak June Employment Data, the Fed Will Still Focus on Inflation

Odaily Odaily reports that Evercore ISI stated, "Employment data has normalized, and the Fed will still focus on inflation." Economists believe the Fed will view the weak June employment data as a return to normal levels for hiring figures, following unexpectedly strong growth in previous months. They noted, "Some believe this report significantly reduces the likelihood of a rate hike this year. We do not fully agree with this view."

Santander Bank analyst Stephen Stanley echoed this sentiment. He stated, "Inflation data will determine the Fed's course of action." He believes the June employment report may "slightly" alter the views of Fed officials, but he expects most policymakers still consider the labor market stable. "Financial markets have shown a considerable overreaction, including lowering the probability of a rate hike this year. I believe the latter is an inappropriate response to this report." (Jinshi)