Part 2/5:
The Fed’s stance is grounded in a positive assessment of the US job market, which continues to show strength. The recent private employment report, issued by ADP, impressed markets with figures surpassing expectations, indicating robust job creation. However, broader economic indicators paint a more nuanced picture: while headline growth figures for the second quarter were strong, underlying consumer spending was weaker than anticipated, signaling potential soft spots ahead.
The central bank also remains vigilant about inflation, which currently exceeds its 2% target. Given the uncertain influence of tariffs—still in flux—the Fed prefers to adopt a cautious approach, suggesting patience before considering a rate cut.