What changed rate cut odds today?

TLDR

Rate cut odds moved today because the delayed US jobs data arrived after hawkish Fed minutes, nudging probabilities back up from a sharp mid?week drop, per a market update.

1. Fed minutes signaled hesitation, pushing odds down near 30% as reported in a market recap.
2. The release of delayed September jobs data lifted odds toward ~40% in the same update.
3. The BLS canceling October employment data earlier reduced odds and added uncertainty, per a news report.

Deep Dive

1. Fed Minutes Hesitation

The October FOMC minutes showed officials were cautious about cutting again this year, which materially lowered cut odds toward ~30%. This shift followed hawkish commentary and revealed internal division about near?term easing in the market recap and a policy coverage piece.

• Minutes emphasized inflation risks and a desire for more evidence before additional easing, dragging probabilities lower in fed funds futures, as summarized in the recap above.
• The broader takeaway was a fractured committee with split views on December policy, per the policy coverage above.

2. Jobs Data Rebound

When the delayed September employment report finally printed, it modestly raised the probability of a 25 bp cut back toward ~40%, according to the market update.

• The report showed mixed signals (stronger payrolls but higher unemployment), which softened the earlier hawkish read and improved odds from the trough in the update above.
• With labor indicators back on the tape, traders had more basis to price a December move versus relying solely on minutes and speeches noted in the update above.

3. Missing October Report

Earlier in the week, the BLS said the October jobs report wouldnt be published before the December meeting, depriving the Fed and markets of a key input and reducing cut odds, per a news report and a policy brief.

• Without Octobers unemployment and household survey data, the committee faces a data gap ahead of the decision, increasing caution in the report above.
• Traders priced more hold risk given limited visibility, as noted in the Bloomberg brief above.

Conclusion

Todays change in rate cut odds reflects a tug?of?war between hawkish Fed minutes and new labor data. If upcoming indicators lean toward cooling inflation and softer employment, probabilities could rise. If inflation proves sticky or data stays patchy, odds likely stall and risk assets remain sensitive to guidance.