Bulls Remain in Control Despite Overbought Conditions

Our View

Friday's jobs report has reignited the rate-cut narrative, despite the unemployment rate ticking up to 4.1%, suggesting the job market is gradually cooling. 

Following Friday’s jobs data, traders in interest-rate futures were betting that there is a 78% chance that the Fed will cut rates at least once by its September meeting, according to CME Group data. 

I still say no way, but it really seems like the Fed wants to prove its point and lower rates, though I think that would be a big mistake. According to JPMorgan, historically, the Fed doesn’t stay on the sidelines during election years but rather continues to pursue its dual mandate of price stability and maximum employment, while maintaining its independence from politics.