The Fed's expectation for a rate cut in December has significantly cooled, with no key data available for reference before the officials' meeting.

On November 20, after the U.S. Labor Department announced that it would not release the October employment report, traders anticipated that the Fed was more likely to pause interest rate cuts at the December policy meeting. Following the Labor Department's confirmation that there was insufficient data to release the report, a wave of dumping occurred in the federal funds futures market. Traders reduced their expectations for a 25 basis point rate cut at the December 10 meeting. They now expect the Fed to maintain the benchmark interest rate in the range of 3.75% to 4%. The swap market, which is linked to the Fed's policy rate, is currently pricing in only a 6 basis point cut for the December meeting, with a cumulative cut of only 19 basis points by January. Prior to Wednesday, the swap market was pricing in 11 basis points, which meant that the chance of the Fed cutting rates within three weeks was about fifty-fifty. Leah Traub, a portfolio manager at Lord Abbet, stated: “We have known for a long time that there would be no unemployment data for October, but the November data will not be released until after the Fed meeting, which should be disappointing news for the market. Given the divisions in the Federal Open Market Committee, this lowers the possibility of rate cuts.” ( Jin10 )