Michael Woolfolk Rates Quotations

Given recent Fed warnings over high levels of capacity utilization and low levels of unemployment, today's report increases the probability that the Fed will raise rates above 5.0% later this year. Last Friday's release of March unemployment further buttresses this view.

If the Bank of Canadian continues to hike rates after the Federal Reserve pauses, it will narrow the rate differential between the two. This will make the Canadian dollar more favorable.

Unemployment has drifted further below 5 percent, and at those levels you have to start being concerned about bidding up of wages. There's a compelling reason to hike interest rates at the next meeting.

The monthly GDP report fed into underlying CAD strength. With political risk subsiding, rising interest rates and fundamental economic strength are prompting CAD buying, which is expected to continue through year-end as USD/CAD heads for the 1.10 mark.

February's data support the view that the U.S. labor market remains strong, particularly on the services side, with unemployment solidly below the 5% level. The Fed is likely to continue raising rates for the foreseeable future.

There's a compelling reason to hike interest rates at the next meeting.

The removal of the word 'measured' ... would be positive for the dollar as it suggests that the Fed is giving itself room to raise rates at a faster pace later this year.

There's a very positive economic story of investors being more willing to take risks and buy equities and less willing to take low rates on bonds.

The market took this to mean that there is a 100 percent chance that interest rates will be increased at the next meeting and a 75 percent chance at the meeting after that.