Despite Weaker June Jobs, Fed Focus Remains on Inflation

Dow Jones07-02

11:11 Evercore ISI says a "back-to-normal employment report keeps the Fed focus on inflation." The economists believe the Fed will look at the weaker June jobs report as bringing hiring data back into better alignment after prior months where payrolls were surprisingly strong. "Some argue that this report makes rate hikes this year significantly less likely. We do not really agree," they say. Santander's Stephen Stanley concurs. "It will be the inflation data that determine the FOMC's course of action," he says. He thinks the June jobs report may change the perception of Fed officials "ever so slightly," but thinks most policymakers regard the labor market as stable. "There was a substantial kneejerk reaction in financial markets, including scaling back the odds of rate hikes this year. I view the latter as an improper response to this release." (patrick.sheridan@wsj.com)

(END) Dow Jones Newswires

July 02, 2026 11:11 ET (15:11 GMT)

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