Bank of America: Friday's nonfarm payrolls data may not be a determining factor for rate hike, still expects September hike

BlockBeats News, September 3rd: Amid recent intense volatility in the bond market, investors are eagerly awaiting two sets of key U.S. data that could influence the Fed's decision: the August nonfarm payroll report to be released this Friday and the August CPI data to be released on September 11th.

However, according to Bank of America, these two data points do not carry the same weight at the Fed's interest rate meeting on September 15th to 16th. The bank believes that the nonfarm payroll report is more like an "appetizer," while the true determinant of whether the Fed will raise interest rates remains the CPI, which serves as the "main course."

Bank of America analysts stated on Wednesday: "Nonfarm payrolls are unlikely to be a decisive factor for a rate hike in September. A significantly weak report may lower the probability of a rate hike, but the CPI remains the key data for the Fed’s decision to proceed with a rate hike. We maintain our view that there will be a rate hike in September." Unless Friday's nonfarm payroll data shows a significant unexpected downturn, the employment report is unlikely to be the ultimate deciding factor in the September FOMC meeting's discussion. The bank particularly emphasizes that inflation remains the Fed's top concern at present.