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Rate-Cut Odds Surge After Soft US Labor Market Signals; Here's What Wall Street Thinks
Rate-cut expectations surged this morning following the weak labor market signals from the payrolls report with 2025 now pricing in 3 full cuts... chart As we predicted, the chance of a 50bps cut in September are also rising, but for now it appears 25bps in each of Sept, Oct, and Dec is the most likely outcome... chart As The Wall Street Journal's fed Whisperer, Nick Timiraos, pointed out in a brief post on X: "Weak hiring this summer will make it easier for Fed policymakers to agree on a 25 bps cut at their meeting in two weeks but further muddies the debate over the pace of cuts after that." Consensus across ... (full story)