By Ann Saphir
(Reuters) - The Federal Reserve is just about done being patient.
That was the view of traders in short-term interest rate futures Friday, after a government report showed U.S. employers sharply slowed hiring in May.
Traders jumped on the report as a sign of a cooling labor market that would force the Fed to start cutting its policy rate in July and reduce it twice more by the end of the year.
Bets for two rate cuts had been priced into the market, mostly in reaction to mounting trade tensions that are expected to slow economic growth.
The U.S. central bank, which raised interest rates four times last year, signaled earlier this year it is on hold for the rest of 2019, saying it will be patient in assessing economic data.
"Today's report certainly supports the case for the Fed to cut interest rates sooner rather than later," said Russell Price, chief economist at Ameriprise Financial (NYSE:AMP) Services in Troy, Michigan. "It shows both that the pace of economic growth may be slowing and yet serious wage inflation pressure seem to remain elusive."
Traders now see a 65% chance that short-term interest rates will end the year at between 1.5% and 1.75%, down from 2.25% to 2.5% now, according to a Reuters analysis of the rate contracts.
