Traders anticipate November rate cut
Labor market will be focus of Powell remarks, D.A. Davidson’s Ragan says
The current view of Fed officials on the labor market could be one the of the big takeaways from Powell’s press conference Thursday, according to James Ragan, director of wealth management research at D.A. Davidson.
“The biggest thing he can talk about is the jobs market because we had that hurricane-impacted number for October. Obviously a weak number, but I think the markets discounted it a lot for the hurricane impact. So I’d like to hear him talk a little a bit beyond that data,” Ragan told CNBC.
The non-farm payrolls report for October showed a gain of just 12,000 jobs. However, storms and a since-resolved strike of Boeing workers could have temporarily lowered that number, according to the Bureau of Labor Statistics.
— Jesse Pound
What to expect at the conclusion of the Fed’s November meeting
With the Federal Reserve expected to make a quarter-point cut on Thursday, the main event for markets will likely be Chair Jerome Powell’s press conference at 2 p.m. ET.
Traders will be on the hunt for clues from Powell on the future path of rate policy. Fed funds futures trading suggests about a 63% chance that the central bank will issue another quarter-point cut in December, but traders are also weighing the likelihood that policymakers may choose to skip that month.
Further complexity lies ahead for the central bank in light of Donald Trump winning a second trip to the White House this week. That is because the new administration’s plans include tax cuts and tariffs, which could affect the Fed’s moves toward tamping down inflation.
Read more about the Fed’s November meeting from CNBC’s Jeff Cox here.
— Darla Mercado
How today’s consumer rates stack up against March 2022
The Federal Reserve is widely expected to trim rates by a quarter point on Thursday, taking another step toward unwinding its tight policy.
To that end, consumer rates have changed significantly since the Fed started 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.
The rate on a $30,000 home equity line of credit sits at 8.7% as of the week of Nov. 1, according to Bankrate. That is down from 9.25% in the week of Sept. 13, but still notably higher than the rate of 4.27% back in March 2022.
Credit card interest rates came in at 20.5% as of last week, per Bankrate, sharply higher than the 16.34% in March 2022. But they are marginally cooler compared to last month’s rate of 20.78%.
The rate on a 30-year fixed mortgage was 7.09% as of the week of Nov. 1, sharply higher than the 4.29% in March 2022. However, it is also higher compared to the week of Sept. 13, when the rate was 6.12%.
That is because mortgage rates loosely follow the 10-year Treasury yield, which has recently taken a leg higher. Indeed, the benchmark yield stood at 4.363% during the week of Nov. 1, sharply higher than the 3.649% it traded at in mid-September.
— Darla Mercado, Nick Wells
Market sees a greater chance the Fed will skip rate cut in December
Traders went into Thursday’s Fed meeting convinced that a rate cut was coming, but were growing less certain about what would happen in December.
The fed funds futures market pointed to a 100% chance that policymakers would ease, with just a sliver of a possibility that the cut might hit a half percentage point in September. Market-implied odds were about 99% for a quarter-point move, according to the CME Group’s FedWatch tracker of 30-day fed funds futures contracts.
For December, odds of a pause are rising, at 32.6% as of midday Thursday, an increase of about 8 percentage points from a week ago. If the Fed doesn’t skip December, the odds for that happening in January are about 68%, the CME gauge shows.
— Jeff Cox
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