The Federal Reserve's interest rate cut expectations have significantly cooled, and the market is focused on tonight's non-farm payroll data guidance.

Recently, the market's expectations for the Federal Reserve to cut interest rates have significantly reversed, and the outlook for easing policies has rapidly cooled. According to the latest data from the CME FedWatch tool, the implied probability of the Federal Reserve cutting rates by 25 basis points at the December meeting has dropped to 32.8%, nearly halving from over 60% a week ago. This means that the probability of no rate cut in December has significantly exceeded that of a rate cut, reflecting a fundamental shift in market expectations.

This shift primarily stems from the cautious signals recently released by several Federal Reserve officials. Federal Reserve Vice Chair Jefferson clearly stated that "further rate cuts need to be implemented slowly." This collective "hawkish" signal has effectively guided market expectations back to a rational state.

The market is currently closely watching the non-farm employment report for September, which is set to be released tonight at 21:30. This data was delayed due to the previous government shutdown in the United States. The market currently expects that this overdue report may not be as weak as previously anticipated.

It is worth noting that the recently released "small non-farm" ADP data has also shown improvements in the labor market, which further strengthens the rationale for the Federal Reserve to maintain high interest rates.

Goldman Sachs, in its latest investment outlook report, has presented a different perspective. The institution predicts that, given the weak labor market, the Federal Reserve is expected to cut interest rates by 25 basis points twice in March and June 2026. This judgment also provides the market with a medium- to long-term observation framework that goes beyond the current volatility.

Overall, the Federal Reserve's policy path is undergoing repricing. The market is seeking a balance between short-term cautious expectations and long-term easing outlooks, while the non-farm data to be released tonight will serve as an important basis for determining the timing of a policy shift, also laying the groundwork for a new round of adjustments in future market expectations.

#美联储 # Non-farm payroll data