Fed Needs To Frontload Interest Rate Cuts, Say 4 Economists: 'Labor Market's Cooling Trend Is Quite Clear'
Portfolio Pulse from Piero Cingari
Economists suggest the Federal Reserve should frontload interest rate cuts due to a cooling U.S. labor market, despite a stronger-than-expected increase in non-farm payrolls. ETFs tracking interest-rate sensitive industries, such as iShares MSCI Global Gold Miners ETF (RING) and iShares Expanded Tech-Software Sector ETF (IGV), outperformed following the jobs report.
July 05, 2024 | 3:56 pm
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POSITIVE IMPACT
The iShares Expanded Tech-Software Sector ETF (IGV) rose by 1% after the June Employment Situation report indicated a cooling labor market, increasing the probability of a September interest rate cut.
Tech stocks often benefit from lower interest rates, which reduce borrowing costs and increase investment in technology. The cooling labor market and potential rate cut positively impacted IGV.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
The iShares MSCI Global Gold Miners ETF (RING) saw a 2.7% increase following the release of the June Employment Situation report, which indicated a cooling U.S. labor market and increased the probability of a September interest rate cut.
The cooling labor market and increased likelihood of a rate cut are positive for gold miners, as lower interest rates typically boost gold prices. This led to a significant rise in RING's performance.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80