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Slower Hiring Boosts Expectations of Delaying U.S. Rate Hike Until December

Slower hiring in the United States has strengthened expectations that the Federal Reserve will not raise interest rates for a second consecutive time at its October 27-28 meeting, postponing the potential move until December, as markets await consumer price index data.

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Slower Hiring Boosts Expectations of Delaying U.S. Rate Hike Until December

The U.S. labor market report released on Friday, which showed a sharper-than-expected slowdown in hiring, strengthened policymakers’ inclination not to deliver a second consecutive interest-rate hike this month and to postpone the potential move until December, allowing more time to assess additional economic data.

Inflation Data Due Before October Meeting

Expectations could change after new data are released, foremost among them the consumer price index, which is being closely watched as a measure of inflation and is scheduled to be published before the Federal Reserve’s monetary policy meeting on October 27 and 28.

Balancing Inflation and Labor-Market Risks

The quarter-point rate hike last month was intended to put inflation on a “faster” path toward the 2% target. Federal Reserve officials are currently weighing the risks of moving too slowly to curb price pressures against the potential harm to the labor market if they move too quickly.

Federal Reserve Chair Kevin Warsh refrained from commenting on the risks he sees or the path interest rates may need to take, while other officials signaled flexibility over the next decision.

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