Will the stronger private‑sector job growth affect the Federal Reserve’s rate‑path outlook and risk‑asset prices?

Answer

The ADP +54 k private‑sector jobs and a 4.4 % YoY wage rise signal that the labor market is still tight and earnings‑driven, a combination that can keep core inflation on an upward trajectory. In the Fed’s “dual‑mandate” calculus, a firmly‑held labor market reduces the room for a rapid soft‑ landing and makes a “higher‑for‑longer” rate stance more plausible. The market will therefore price a later first cut (likely Q4 2025 at the earliest) and a flatter‑to‑upward‑tilted policy curve through the end of the year.

From a risk‑asset perspective the immediate market reaction should be: