A resilient US labour market and rising American wages have challenged hopes about the Federal Reserve’s ability to rein in inflation and slow its frenetic pace of interest rate increases., beating forecasts of 200,000, and average hourly earnings added 0.6 per cent, in the biggest monthly rise in nearly a year. Wages gained 5.1 per cent from a year ago.
The chance of a fifth-straight 0.75 percentage point increase at the December 13-14 Fed policy meeting crept up slightly, but financial markets indicate a 0.5 percentage point move is by far the higher probability. Chicago Federal Reserve Bank president Charles Evans said on Friday that the Fed will probably reach a slightly higher peak funds rate, but still discussed stepping down the pace of rate increases.Meanwhile, the step-down in the ferocious global tightening cycle has prompted financial markets to pare back their expectations of when they think the RBA will stop raising the cash rate. They now imply it will peak at 3.5 per cent, from a top of 3.9 per cent forecast last week and down from 4.