Traders now see little chance of a Fed rate hike in October after weak jobs report
Odds tumbled after a jobs report showed a soft labor market, leading more traders to lower the the chances of a fed funds rate increase this month.
TL;DR
- The September jobs report showed only 29,000 jobs added, falling short of expectations.
- This weak jobs data, along with a cooler-than-expected inflation report, has led traders to believe an October Fed rate hike is extremely unlikely.
- Market tools like CME's FedWatch show a low probability (17%) for an October hike, down significantly from a week prior.
- Investors still expect the Federal Reserve to raise interest rates in December, with odds above 75% on FedWatch.
- The Fed is balancing its dual mandate of full employment and steady prices, having previously raised rates to combat inflation.