Markets have adjusted their expectations for future Fed rate cuts following the release of strong economic data. Prior to the September employment report, investors were forecasting a 67% probability of a rate cut in the remainder of 2024. However, the strong performance of the labor market, coupled with a rise in consumer prices and weekly jobless claims, has led to a reduction in the probability to 45%.
In turn, we highlight that Raphael Bostic, president of the Atlanta Fed, has indicated that the Fed could omit a rate cut at its next meeting if economic data justifies such a decision. This shows a more cautious stance on monetary policy easing, especially if inflationary indicators remain persistent.
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