Please join Ralf Preusser in conversation with Aditya Bhave, Mark Cabana and Alex Cohen post-payrolls. Since Fed Chair Warsh is trying to move away from forward guidance, the importance of US data will only increase. We will discuss the outlook for the Fed, US rates and the USD in light of the US labor market data.<br><br>&quot;Bank of America&quot; and “BofA Securities” are the marketing names for the global banking businesses and global markets businesses (which includes BofA Global Research) of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Securities, trading, research, strategic advisory, and other investment banking and markets activities are performed globally by affiliates of Bank of America Corporation, including, in the United States, BofA Securities, Inc. a registered broker-dealer and Member of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. ©2026 Bank of America Corporation. All rights reserved.

Post NFP Call

Global Research Unlocked

# Full Transcript

**Podcast:** Global Research Unlocked

## Transcript

Hello and welcome to Global Research Unlocked, the Interest Rate and FX series. This podcast is based on our weekly client conference call where our strategists, along with guests from other parts of BofA Global Research, discuss the most topical and pressing questions faced by our market. I'm Rav Preusser, Head of Global G10 Rates and FX Strategy. Today's Thursday, 2nd of July. I'm joined today by GTI Bavir, US Chief General, Mark Cabana,

Co-Head of Global Rates Research and Alex Cohen from FX Strategy. Thank you all for joining. Aditi, let's start with you. A disappointing number, lower than consensus, backward revisions. What's your first take? Thanks, Rav. Good morning, everyone. Thank you for joining and happy fourth. It was a soft number, payrolls well below expectations with meaningful downward revisions. That said, a lot of the

weakness in the number appears to be due to one-offs, both in the Mayprint, which was driven by a 61,000 drop in leisure and hospitality. That's likely due to seasonal factors. And also the revisions, which saw some of the anomalous numbers from last month marked down. What matters from our perspective

is the three-month growth rate of non-farm payrolls is still a very healthy 111,000, well above where we think break-even is. We think it's at 20,000, even if it's a little bit higher. The case remains that we're well above break-even. And then also the unemployment rate fell. It fell for bad reasons, to be clear. There was a huge markdown in participation, which again appears to be a bit of a

one-off. And so both employment and unemployment in the household survey declined, but they netted out into a drop in the unemployment rate. So, perspective, it helps that the unemployment rate fell. Does it help as much given the drop in participation? No, right? So if we had had a 61.8%

rate instead of 61.5% and a 4.2% unemployment rate, this would have been much more hawkish. But at the end of the day, the Fed views the unemployment rate as the core measure of balance between supply and demand in the labor market. It's worth noting that the only labor market measure

that the Fed projects in the SEP is the unemployment rate, not payrolls, not participation. And the range of forecasts for year-end 2026, for the unemployment rate, is 4.3% to 4.4%. So nobody expected it to fall to 4.2% by the end of the year. We're already there. Will we stay there? We'll see in coming months. But I think that offsets some of the dovish read of today's number.

Thanks, Adita. You preempted my question about the unemployment rate. So thank you for the thorough review. Clearly, with this number, there's no urgency for the Fed to hike in July. There was still some speculation in the market about whether or not a July hike was possible. That seems less likely. I guess I'll rephrase the question a little bit differently. What gets the Fed over the line to hike in September...

Post NFP Call

Transcript

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Post NFP Call

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.