Fed cuts rates by 25bps in June 2026 due to cooling labor market

The slower-than-expected wage growth (3.6% YoY vs. 3.8% forecast) and modest jobs addition (115k vs. 55k forecast) signal economic cooling. With unemployment steady at 4.3%, the Fed is likely to prioritize inflation risks over growth, leading to a rate cut.

Implied probability (Yes)

70%