After weeks of a tense political environment, investors were able to take a sigh of relief as lawmakers in the United States came to an agreement on suspending the United States debt limit. Had this debt ceiling not been changed, the government faced a first-ever default on their bills which would have sent widespread panic throughout financial markets.
Now that this has been solved for the time being, investors will now turn their attention to the Fed’s next meeting in just a few weeks, where they will decide whether to hike interest rates or to take their first pause since this rate hiking cycle began back in March of last year.
Members of the fed will be extremely focused on Friday’s jobs report, which came in much hotter than expected, with the US economy adding 339,000 jobs during the month of May, which is much more than the 190,000 jobs that economists had forecasted.
Prior to this release, markets were expecting the Fed to pause their rate hikes, but this hot jobs report will likely have some members of the Fed arguing for further increases in interest rates in an effort to slow growth and inflation.
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