Federal Reserve Rate Cuts Anticipated as Job Market Decelerates

The U.S. job market is exhibiting signs of slowing down, as indicated by a recent government report. This has led traders to predict a pause in interest rate increases and the potential start of rate cuts by the Federal Reserve as early as May. Following the report, futures contracts suggest there is now less than a 20% chance of a Fed rate hike by January, a decline from earlier estimates of 30%.

According to the Labor Department, nonfarm payrolls rose by 150,000 last month, which is lower than the anticipated job gains for September. Additionally, the unemployment rate increased to 3.9% from 3.8%, and wage growth has not met expectations.

Despite these developments, the Federal Reserve, led by Jerome Powell, has kept its policy rate steady at 5.25%-5.50%, which traders believe will help achieve the Fed’s 2% inflation target.

This article was generated with AI assistance and reviewed by an editor.