Wall Street no longer expects the U.S. Federal Reserve to lower interest rates in June following a hot jobs report for the American labour market.
According to the CME FedWatch Tool, only 37% of futures traders now expecting the U.S. Federal Reserve to cut interest rates by 25-basis points at its next policy meeting on June 18.
That’s down from nearly 80% of traders who were pricing in a June rate cut as recently as a week ago.
The change in outlook comes after data released on May 2 showed that nonfarm payrolls in the U.S. during April increased by 177,000, above the consensus estimate of economists that called for 133,000 new jobs to be created.
The U.S. unemployment rate held steady at 4.2% in April, as expected.
The strong jobs report came as a surprise and has led many economists to revise their forecast for interest rates throughout the remainder of this year and heading into 2026.
In a note to clients, Wall Street investment bank Goldman Sachs (GS) wrote that the U.S. central bank is most likely to deliver its first interest rate cut this year on July 30, at the earliest.
Economists at Goldman Sachs had previously forecast a rate cut in June but have pushed that expectation out to July after the stronger-than-expected U.S. labour market report.
While economists expect the Federal Reserve to remain on the sidelines in the interim, U.S. President Donald Trump continues to call publicly for immediate interest rate cuts to boost the American economy.
Goldman Sachs’ stock is down 2% on the year and currently trading at $566.10 U.S. per share.