The labor market will be the focus of Powell’s remarks, says DA Davidson’s Ragan
Fed officials’ current view of the labor market could be one of the key takeaways from Powell’s press conference on Thursday, according to James Ragan, director of wealth management research at DA Davidson.
“The biggest thing he can talk about is the labor market because we had that hurricane-impacted number for October. Obviously a weak number, but I think the markets discounted the impact of the hurricane a lot. So I I’d like to hear that. Let’s talk a little bit beyond that data,” Ragan told CNBC.
The nonfarm payrolls report for October showed a gain of just 12,000 jobs. However, storms and a since-resolved strike by Boeing workers may have temporarily lowered that number, according to the Bureau of Labor Statistics.
– Jesse Pound
What to expect at the end of the Fed’s November meeting
With the Federal Reserve expected to make a quarter-point rate cut on Thursday, the key event for markets is likely to be Chairman Jerome Powell’s press conference at 2pm ET.
Traders will be looking for input from Powell on the future path of rate policy. Fed funds futures trading suggests about a 63% chance the central bank will issue another quarterly rate cut in December, but traders are also weighing the likelihood that policymakers could choose to skip that month.
Further complexity awaits the central bank in light of Donald Trump’s victory in a second trip to the White House this week. That’s because the new administration’s plans include tax and tariff cuts, which could affect the Fed’s moves to lower inflation.
Read more about the Fed’s November meeting from CNBC’s Jeff Cox here.
–Darla Mercado
How today’s consumer rates increase versus March 2022
The Federal Reserve is widely expected to cut rates by a quarter point on Thursday, taking another step toward easing its tightening policy.
To that end, consumer rates have moved sharply since the Fed began its hiking campaign in March 2022 — and in some corners of the market, interest rates have cooled slightly since the central bank made its first half-point cut in September. .
According to Bankrate, the rate on a $30,000 home equity line of credit stands at 8.7% as of the week of November 1st. This is down from 9.25% in the week of September 13, but still significantly higher than the rate of 4.27% in March 2022.
Credit card interest rates came in at 20.5% last week, per Bankrate, significantly higher than the 16.34% in March 2022. But they’re a bit cooler than last month’s rate of 20.78%.
The rate for a 30-year fixed mortgage was 7.09% in the week of November 1, significantly higher than the 4.29% in March 2022. However, it is also higher compared to the week of September 13, when the rate was 6.12%.
This is because mortgage rates follow loosely The 10-year Treasury yieldwhich has recently raised a leg higher. Indeed, the underlying yield stood at 4.363% during the week of November 1, significantly higher than the 3.649% it was trading at in mid-September.
–Darla Mercado, Nick Wells
The market sees a greater chance that the Fed will skip a rate cut in December
Traders entered Thursday’s Fed meeting convinced that a rate cut was coming, but were becoming less certain about what would happen in December.
The Fed funds futures market indicated a 100% chance that policymakers would ease, with just a sliver of a chance that tapering could reach half a percentage point like in September. Market-implied odds were about 99% for a quarter-point move, according to CME Group’s FedWatch tracker of 30-day fed funds futures.
For December, the odds of a break are rising — to 32.6% as of midday Thursday, up about 8 percentage points from a week ago. If the Fed doesn’t make it through December, the odds of that happening in January are about 68%, the CME gauge shows.
– Jeff Cox