Americans tired of sky-high borrowing costs could be disappointed this week

Another month, another strong jobs report has Wall Street considering when the Federal Reserve will cut interest rates. In May, the US economy added 272,000 jobs, surpassing economists’ predictions. The jobless rate increased slightly to 4%. While a resilient labor market reduces the risk of a recession, it also delays anticipated interest rate cuts by the Federal Reserve. Traders expect rate cuts to happen after September. The Fed is likely to maintain rates at its policy meeting this week due to inflation remaining above the 2% target. Investors are waiting for the Summary of Economic Projections for insights into future rate movements.

As for the Fed’s projection for three quarter-point rate cuts this year, adjustments to two cuts are possible. The number of cuts, whether it’s two or three, isn’t crucial as the most significant point is the initiation of a cutting cycle, aligning with other global central banks. The European Central Bank and Bank of Canada have already started cutting rates, which affects the dollar’s strength. Delaying rate cuts could create problems for risk assets, primarily outside the US. Despite potential stock market volatility during election season, it is unlikely that significant policy changes will occur due to the evenly split US electorate.

A labor union at Samsung Electronics in South Korea went on strike for the first time in the company’s history. The Nationwide Samsung Electronics Union (NSEU), representing around 28,000 workers, staged a one-day strike to address issues regarding pay and bonuses. Many NSEU members work in Samsung’s semiconductor unit, which is competing to regain its status as a top semiconductor company. Samsung has assured that production and management activities remain unaffected by the strike.

Federal regulators are planning to accuse Southern Glazer’s Wine and Spirits, America’s largest alcohol distributor, of unfair pricing using a rarely enforced law from the Great Depression. The lawsuit aims to lower costs for consumers and create a level playing field for smaller businesses against big chains. This action aligns with the Biden administration’s efforts to decrease costs for consumers and challenge dominant companies. This potential lawsuit reflects a bold move by FTC Chair Lina Khan, who has previously prohibited noncompete clauses and is investigating a Microsoft deal. The litigation is expected to rely on the Robinson-Patman Act of 1936, which prevents suppliers from offering deeper discounts to large chains over smaller stores.