Overview
- Futures pricing implies roughly an 85%–90% chance of a 25 basis point rate cut on Dec. 10, according to CME FedWatch.
- Labor readings remain contradictory, with ADP reporting a 32,000 drop in private payrolls while initial jobless claims fell to a three-year low.
- With November payrolls postponed by the shutdown, investors look to Friday’s PCE inflation and income/spending releases for final guidance before the Fed meets.
- U.S. equities are hovering near record levels as chip and large-cap tech strength offsets drags in staples, and Japan’s Nikkei reversed a prior surge on renewed BOJ hike bets.
- Political risk stays in focus after reports that investors raised concerns about Kevin Hassett as a potential Fed chair pick and the possibility of more aggressive rate cuts.