Expectations for a Fed rate cut in December cool significantly, with no key data available before officials' meeting

Jinse Finance reported that after the US Department of Labor announced it would not release the October employment report, traders now expect the Federal Reserve is more likely to pause rate cuts at the December policy meeting. Following confirmation from the Department of Labor that there was insufficient data to publish the report, there was a wave of sell-offs in the federal funds futures market. Traders have reduced their expectations for a 25 basis point rate cut at the December 10 meeting. They now expect the Federal Reserve to keep the benchmark interest rate in the 3.75% to 4% range. The swap market, which is linked to the Fed's policy rate, is currently pricing in only a 6 basis point rate cut for the December meeting, and a cumulative rate cut of just 19 basis points by January. Before Wednesday, the swap market was pricing in 11 basis points, which meant the probability of a rate cut by the Fed within three weeks was about 50-50. Leah Traub, a portfolio manager at Lord Abbet, said: "We have long known that there would be no October unemployment data, but the November data will not be released until after the Fed meeting, which should be disappointing for the market. Considering the divisions within the Federal Open Market Committee, this reduces the likelihood of a rate cut."