Rate Cut Pause May Continue Till September As US Job Market Stays Firm: Report

The US Federal Reserve is unlikely to resume its easing cycle before September 2025, according to a report by Bank of Baroda. The expectation is based on the latest Job Openings and Labour Turnover Survey (JOLTS) report, which showed stronger-than-expected job openings for May 2025.

The JOLTS data revealed that job openings in the US rose to 7.76 million in May 2025, up from 7.39 million in April 2025. However, hiring declined to 5.5 million, with the major drop seen in the healthcare and business services sectors.

This mixed labour market data suggests that while job availability remains strong, actual hiring activity is slowing. The report also highlighted comments from the US Federal Reserve Chair, who reiterated that the Fed would continue to remain in "wait and watch" mode. The central bank is carefully assessing the economic impact of the recent tariff measures before making any decisions on interest rates.

Meanwhile, the US manufacturing sector showed some signs of improvement. The ISM Manufacturing Purchasing Managers' Index (PMI) rose to 49 in June, marking a six-month high, up from 48.5 in May.

Also Read: Oil Prices Steady As Market Weighs OPEC+ Supply Outlook And US Economic Signals

Despite the improvement, the index remains below the 50-mark, indicating continued contraction. Inflation risks persist, as reflected in the price index component of the ISM manufacturing data.

The report also stated that the investors are now expected to shift their attention to the upcoming US employment report for more insights into the labour market trend.

In the UK, the report noted that average housing price growth slowed to 2.1 per cent in June from 3.5 per cent in May. This moderation indicates weaker demand, possibly due to the recent hike in stamp duty.

On the global bond market front, the report added that yields fell across most regions, except in the US and China. The US 10-year treasury yield edged up by 1 basis point after the Senate passed the Trump administration's spending bill.

In India, the 10-year government bond yield dropped by 3 basis points, following a decline in global oil prices. However, it is now trading slightly higher at 6.30 per cent, reflecting movements in global bond markets. 

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