Fed Rate Cut? 25 Basis Points, Sure. 50 Basis Points? Not Yet

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The jobs data from ADP are signaling the Federal Reserve may soon get even more serious about a rate cut. 

Senior Economic Analyst from Bankrate.com, Mark Hamrick, broke down why this reports may certainly mean a rate cut soon, but may not mean a huge rate cut. 

"The Fed would need to see more than just one single jobs report to sort of make a substantially more aggressive move with monetary policy," Hamrick said. 

He continued:

"If you were betting your neighbor's money, you might bet here that the Fed will cut by 25 basis points in July and then obviously hold out the possibility of another rate cut possibly as early as September. Last year, we had four rate increases and lo and behold, when we got into December, the Fed was signaling that it would go with as many as two to four rate increases in this year and the financial markets basically got a severe case of indigestion if not worse. And of course it was through that process that the fed and Jerome Powell pivoted not once, but twice saying that essentially they were close to neutral on Fed funds."

"The Fed needs to get out several more months to see what else it may need to do."

Unsurprisingly, the 10 year treasury yield is at 1.95% Wednesday. 

Related. Lower Rates Provide Fireworks, but a Dangerous Earnings Season Beckons

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