Surge in Jobs Gives Fed Clearer Path to Raise Rates This Year - Bloomberg

The resurgent U. S. job market is providing Federal Reserve officials reason to look beyond the economy’s first-quarter swoon toward an increase in interest rates later this year. The 280,000 rise in payrolls in May suggests that the central bank is making progress toward its goal of maximum employment, William C. Dudley, president of the Federal Reserve Bank of New York, said on Friday. “It is likely that conditions will be appropriate to begin monetary policy normalization later this year,” Dudley, who is vice chairman of the central bank’s policy-making Federal Open Market Committee, said in a speech in Minneapolis. Traders of money-market derivatives lifted the chance of the Fed raising rates this year following the jobs data. Futures show a 50 percent chance the Fed will increase interest rates by its October meeting, up from 43 percent Thursday, according to CME Group data. September Likelier “The most consistent message from policy makers this week is that they’re still data dependent, and we got one pretty big piece of data today, and that solidifies the chances for a September rate hike,” said Guy Berger, U. S.... At their last gathering in April, many policy makers considered it unlikely they would increase rates in June, according to minutes of that meeting released by the central bank. Source: www.bloomberg.com