BlockBeats message, October 2: Nonfarm data further strengthened the view that momentum in the U.S. labor market is cooling. According to the CME’s “FedWatch” tool, traders currently expect a probability of 83% that the Federal Reserve will hold interest rates unchanged at its October meeting, up from 72% before the employment report was released; the probability of a rate hike has fallen from 28% to 17%. Interest rate expectations have also eased.
At present, pricing in federal funds futures shows that the market expects that by the end of 2026, the Fed will have cumulatively hiked rates by about 22.2 basis points, lower than the 25.5 basis points expected before the data release. (Jin Shi)
At present, pricing in federal funds futures shows that the market expects that by the end of 2026, the Fed will have cumulatively hiked rates by about 22.2 basis points, lower than the 25.5 basis points expected before the data release. (Jin Shi)