Expectations for two more Fed rate cuts in 2024 rise after jobs data

Futures traders saw the odds that the Federal Reserve will cut interest rates by 25 basis points twice this year increased after the latest October jobs report showed just 12,000 new jobs were created last month. while the figures for the previous two months were sharply revised. below.

Taken together, these data suggest that the US labor market is weakening faster than previously expected.

“The poor jobs and downward revisions are even worse than hurricane-adjusted estimates. This report dampens the enthusiasm compared to last month’s report,” said Bryce Doty, senior portfolio manager at Sit Investment Advisors, in comments he shared with MarketWatch via email.

CME Group data showed traders now view a 25 basis point cut next week as a de facto certainty, with expectations approaching 99%. Expectations for another 25 basis point cut in December rose to nearly 85%, up from about 75% ahead of the data.