Branch2 Intelligence
Labor Market Not a Source of Inflationary Pressure, Latest Report Shows
Key takeaway
US unemployment ticked down to 4.2% but wage growth steady, giving Fed Chair Warsh room to keep rates higher for longer.
- Step 11st-order: US labor market data shows steady wages, allowing Fed to keep rates higher-for-longer.
- Step 22nd-order: US term premium widens, transmitting to UK gilt yields via cointegrated long-rate markets.
- Step 33rd-order: UK SME borrowing costs rise as lenders reprice revolving facilities and mortgages.
- Step 44th-order: UK discretionary spending and construction activity soften as households and businesses face higher financing costs.
Source: NYT Business
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