Weak Nonfarm Payrolls Data, but Fed Officials Unanimously Signal No Need for Rate Cuts!

TradingKey - U.S. February nonfarm payrolls fell short of expectations, but this has not changed the Federal Reserve's stance on maintaining current interest rates. 

U.S. nonfarm payrolls increased by 151,000 in February, falling short of market expectations, while the unemployment rate unexpectedly rose from 4% to 4.1%, the highest since last November. Despite this, several Fed officials have reiterated their commitment to keeping interest rates unchanged.

Speaking at the University of Chicago Booth School of Business, Fed Chair Jerome Powell, "The current U.S. economic situation remains favorable, with a balanced and robust labor market. The Fed should remain cautious, and there is no need to rush to adjust policy rates at this stage. We can patiently wait for the situation to become clearer, as the cost of caution is very low."

San Francisco Fed President Mary Daly noted, "Market data has its ups and downs, and FOMC policymakers do not need to make a rate cut decision at next week's meeting, as the current interest rate level is appropriate, and the U.S. economy remains strong."

Fed Governor Adriana Kugler added, "Given the recent rise in inflation expectations and the lack of progress in key inflation categories toward our 2% target, it may be appropriate to maintain the policy rate at its current level for some time."

Market data indicates, the market expects a 97% probability that the Fed will keep rates unchanged in March, with only a 3% chance of a 25-basis-point cut.

Market Expectations for Fed's March Rate Decision, Source: CME Group.