Investors Increase Likelihood of Fed Rate Cut in December Amid Labor Market Weakness

Investors Increase Likelihood of Fed Rate Cut in December Amid Labor Market Weakness

JPMorgan economists now expect the Federal Reserve to begin rate cuts in December, projecting two 25 basis point reductions supported by top Fed officials’ remarks.

Fact Check
The evidence provided consistently and authoritatively supports the statement that the U.S. Labor Department did not release its October Jobs Report. The most definitive source is the official announcement from the Bureau of Labor Statistics (BLS), the agency within the Labor Department responsible for the report. This primary source explicitly states that it will not publish the October report due to a lapse in appropriations. This information is directly corroborated by multiple high-authority news organizations, including NBC News, Bloomberg, and MarketWatch. These reports are consistent, all stating that the October jobs report was canceled and attribute the information to the BLS. The reason cited across the sources is a government shutdown, which prevented the collection of necessary data. There is no conflicting evidence among the provided sources. The New York Times article, while published before the official cancellation, provides context by discussing the potential for data delays due to the shutdown, which aligns with the eventual outcome. The consensus across all relevant sources is unambiguous.
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Summary

JPMorgan’s economics team, led by Michael Feroli, has revised its forecast to predict that the Federal Reserve will start rate cuts in December instead of January. The bank expects two consecutive 25 basis point cuts, the first in December and the second in January, citing support from top Fed officials. This aligns with market expectations that have surged amid labor market weakness and dovish Fed commentary.

Terms & Concepts
  • Basis Point: A unit of measure equal to one hundredth of a percentage point, commonly used in interest rate discussions.