Strong economic numbers Thursday caused markets to reassess the possibility of a rate cut in coming months, reported CNBC’s senior economics reporter, Steve Liesman.
“For the first time since February, traders are putting a less-than-50% chance on a rate cut at any of the next five Fed meetings,” Liesman told “Closing Bell.” He explained that the Fed Funds Future contract, which had priced in rate cuts last month, is now pricing it out.
Meanwhile, data from both the service and productivity sectors beat expectations. The Institute for Supply Management said its April service indicator rose to 56 from a multi-year low in February. (A reading above 50 generally indicates growth for the sector, while a reading below 50 indicates contraction.)
And the U.S. government reported that productivity increased 1.7%. The evidence points to a boost for big business, Liesman reported, but Friday’s job numbers are expected to really confirm if the U.S. economy is heading out of first-quarter doldrums.