Investing.com - With market participants speculating on what Federal Reserve Chair Janet Yellen will say Monday about the disappointing May nonfarm payrolls number released on Friday, several voting members of the U.S. central bank had already weighed in on how the data affected their outlook on the future path of rate hikes.
“The data in today’s labor market report on balance suggests that the labor market has slowed,” Fed governor Lael Brainard said on Friday following the report.
Brainard also cited the upcoming June 23 referendum on the U.K.’s membership in the European Union (EU) and the risk of a Brexit, or a vote to leave the EU, as a global risk that the Fed should take into consideration.
In order for a rate hike to occur, the Fed governor, known for her dovish stance, suggested that data needed to provide greater confidence that the activity in the U.S. economy was rebounding.
To the contrary, Cleveland Fed president, and known hawk, Loretta Mester shrugged off the disappointing number.
“You can’t read too much into one number,” she explained over the weekend, while admitting that it did need to be taken into account.
“The weak employment number has not changed fundamentally my economic outlook,” Mester add, insisting that the economy was heading in the right direction.
On Monday, Boston Fed president Eric Rosengren admitted that the number was “disappointing”, but said it would be important to see whether it was an anomaly or reflected broader slowing in the labor market.
Rosengren also noted that May’s unemployment rate of 4.7% was the lowest since December 2007 and that he considered the U.S. economy to be at full employment.
Fed fund futures put the odds on a rate hike in June to just 6% on Monday, compared to 4% at the close on Friday and 21% prior to the release of the employment report. The CME Group FedWatch tool continues to rule out a rate hike this summer with the probability passing the 50% threshold only for the November 2 decision.
Later on Monday, markets will receive Yellen’s opinion on the state of play for policy tightening after the jobs data. She will speak on the economy and monetary policy to the World Affairs Council of Philadelphia at 16:30GMT, or 12:30ET.