KBRA notes signs of weakness in the US labor market, supporting the Federal Reserve's wait-and-see strategy

KBRA Global Sovereign Ratings Head Joan Feldbaum-Vidra stated ahead of the Federal Reserve's interest rate decision that, although the overall U.S. economy remains strong, recent non-farm payroll and job creation data have shown signs of labor market weakness, supporting a wait-and-see approach by the Federal Reserve. She also pointed out that the resumption of oil transportation in the Middle East typically helps mid-term oil prices to decline. However, considering the risk of further escalation of conflicts after the U.S. mid-term elections, oil prices remain at elevated levels. Additionally, she said: "The large-scale borrowing demand from AI companies and the U.S. Treasury is driving yields to stay high, which to some extent helps the Federal Reserve achieve its policy objectives."