Conflicting Signals from U.S. Labor Market
While December's jobs report showed sluggish growth in payrolls, declining job openings, and slow wage gains—pointing to a weakening labor landscape—the slight drop in unemployment offered a rare positive sign. This mixed picture is now shaping the Fed's policy calculus.
Markets Bet on Midyear Rate Cuts
Futures pricing indicates near-zero chance of a cut in January, with June emerging as the most likely start for easing. This shift reflects growing confidence that the Fed will stay patient, waiting for clearer signs before pivoting.
- Falling unemployment eases concerns of a sharp downturn
- Slower wage growth reduces inflation persistence risks
- Declining vacancies signal cooling employer demand
In parallel, a potential court ruling could reshape trade dynamics, adding tailwinds to equities. In the near term, stocks and the dollar may strengthen, while Treasury yields face upward pressure.