According to the FedWatch tool, the Federal Reserve has a 60% probability of hiking rates by 25 basis points. The odds rose after the government posted that the economy added 162,000 jobs.

This week, the Bureau of Labor Statistics will report on the Consumer Price Index. Soaring oil prices, caused by a forever war situation in the Strait of Hormuz, increased energy prices. Still, the Fed failed to lower core inflation rates from the 3% range for five years. There is no hurry to hike rates this month ahead of the mid-term elections.

Inflation from oil lifted ExxonMobil (XOM), while prices are rising for metals. That boosted Freeport-McMoRan (FCX) and Teck (TECK).

Characterized as politically independent, the Fed still faced pressure from the White House. Over the weekend, President Trump called for the Fed to cut rates. Otherwise, he would stop trading with other nations.

The U.S. vice president and Treasury secretary also urged the Fed to cut interest rates.
Inflation is becoming increasingly onerous on consumers. Aside from their mismanagement, firms like Nike (NKE) and Lululemon (LULU) experienced weak sales in the last quarter. The S&P 100 (SPY) removed Nike from the index, which was on the index for 18 years. It replaced the retailer with Palo Alto Networks (PANW), Arista Networks (ANET), and SanDisk (SNDK). The index also removed Colgate-Palmolive (CL), Honeywell Aerospace (HONA), and Simon Property Group (SPG).

Your Takeaway

The odds of a rate hike are over 50%, but the mid-term elections coming up would give the Fed a reason to pause that decision.