WASHINGTON -- Bond market hopes that the Federal Reserve will have to abandon its neutral policy on interest rates and ease credit another notch got a big boost Friday after the Labor Department reported that the job market stagnated in July for the second month in a row.

Financial analysts said as a result of the report that there is an increasing likelihood that Fed officials soon will have to lower the federal funds rate another notch, to 5.5% from 5.75%. Some said they expect a move before the Aug. 20 meeting of the Federal Open Market Committee.

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