Fed seen less likely to raise rate after jobs data

Investors increased their bets that the Federal Reserve will keep interest rates unchanged this year after data pointed to weakness in the US labor market, reversing earlier market expectations that had shifted toward a more hawkish outlook.

According to the FedWatch Tool, markets now see a 45% probability that the Fed will leave interest rates unchanged at its September meeting, up from 36% a day earlier while the probability of rates remaining at the current range also rose to 35% for the October meeting and 22% for the December meeting, compared with 27% and 17%, respectively, on the previous day.

The shift followed data released on Thursday showing that the US economy added 57,000 jobs in June, well below expectations of 110,000 and marking a sharp slowdown from the 148,000 jobs added in May.