The U.S. economy unexpectedly shed jobs in July, causing the odds of a Federal Reserve rate hike in September to tumble. According to prediction platform Kalshi, the probability that the Fed holds rates steady in September jumped to 65%, compared with 50-50 before the report. CME’s FedWatch tool now shows these odds at 60%, up from 33% a week ago. Treasury yields fell and stocks rose as investors priced in this new outlook. July’s Consumer Price Index report, due on August 12, will be the deciding factor for the Fed’s decision.
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