The Fed: It’s ‘hallucinatory’ to expect a half-point Fed rate cut now — but economists still expect a quarter-point reduction

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Fed Chairman Jerome Powell testifies next week on Capitol Hill.

The solid June jobs report removes any chance that the Federal Reserve will cut interest rates by a half-point at the next meeting at the end of the month, economists said Friday.

“I think we’ll get 25 basis points. Anything more is hallucinatory,” said Brian Bethune, chief economist for Alpha Economic Foresights.

The economy added 224,000 jobs as hiring rebounded in June. That was well above the 170,000 forecast of economists and the disappointing 72,000 gain in May that set Wall Street on edge.

Is the number strong enough to keep the Fed on hold?

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