October 4, 2024 – The U.S. unemployment rate unexpectedly fell to 4.1%, signaling stronger-than-expected employment data. Following this release, traders anticipate that the Federal Reserve will maintain a cautious approach to cutting interest rates.
Key Developments:
- 25 Basis Points Rate Cuts: Traders now expect the Fed to implement 25 basis points rate cuts in both November and December.
- Rate Cut Projections: The Federal Reserve is expected to cut interest rates four times in upcoming meetings, with the total reduction likely remaining under 100 basis points over that period.
- Economic Outlook: The drop in unemployment has tempered expectations of more aggressive rate cuts, as stronger employment figures suggest the economy remains resilient.
This adjustment reflects market sentiment that the Fed will prioritize controlling inflation while making gradual rate cuts to manage economic growth.
