Investors anticipate the release of critical labor market data between Wednesday and Friday, heightening their expectations for aggressive rate cuts by the Federal Reserve.
Expectations for a 50-basis-point rate cut at the Sept. 18 Federal Open Market Committee (FOMC) meeting slightly increased during Tuesday’s trading, as manufacturing surveys revealed further contraction in activity for August.
Market-implied probabilities for a half-percentage-point rate cut this month rose to 37%, up from 30% last Friday, according to data from CME FedWatch.
Market participants are factoring in approximately 90 basis points — or nearly a full percentage point — of rate cuts across the next three FOMC meetings by December 2024.
Labor Market Data to Watch This Week
A significant wave of economic data will offer traders critical insights on the state of the labor market:
Wednesday: Job openings and quits for July, a month that saw a cooling employment landscape. Economists predict a slight decrease in job vacancies from 8.18 million to 8.10 million.
Thursday: At 8:15 a.m., the ADP will release private payroll data for August, with expectations for job ...
