Credit to Barclays economists for coining the term ‘Septaper’
A solid U.S. employment report for June appears to have cemented market expectations that the Fed will begin to reduce the pace of its bond-buying stimulus in September. Average employment growth for the last six months is now officially above 200,000 per month.
Never mind that, even at this rate, it would take another 11 months for the job market to reach its pre-recession levels – and that’s not counting the population growth since then.
John Brady, managing director at R.J. O’Brian & Associates in Chicago, nails the market’s sentiment:
This number keeps the Fed tapering at the September FOMC on track. The market is reacting with the idea that the Fed will begin tapering in September.
Cragi Dismuke, chief economic strategist at Vining Sparks in Memphis, Tennessee adds: