WORLDTECHStrong October jobs data lifts odds of a December Fed rate hike
A stronger-than-expected October jobs report has increased speculation that the Federal Reserve could raise interest rates again in December, according to a report from Crypto Briefing.
Payrolls beat forecasts and unemployment eased
Nonfarm payrolls grew by 165,000 in October, far ahead of the consensus forecast of 65,000. At the same time the unemployment rate dropped to 4.1%.
The gap between the figure and expectations is what drove the reaction, Crypto Briefing reports, as it strengthened the case for tighter policy.
Futures markets reprice a December hike
Following the release, futures markets shifted noticeably. The implied probability of a 25-basis-point increase at the Fed's December meeting is now estimated between 76% and 79%, compared with roughly two-thirds before the report came out.
The move shows traders treating a further hike as more likely than they did earlier, although the figures are market-implied estimates rather than a Fed decision.
Where policy stands now
The Federal Reserve's current target range for the federal funds rate is 3.75% to 4.00%. The central bank last raised rates in September, and a December increase would build on that move.
The report does not say how Fed officials have responded to the data.
Open questions
- Will Federal Reserve officials confirm a December hike in their public remarks?
- Will upcoming inflation data keep the market odds at their current level?