Economists at U.K. bank Barclays, a key player in the U.S. Treasurys market, have revised their forecast for a Federal Reserve rate hike, pushing it back to January. This decision comes in response to a disappointing increase of only 150,000 jobs in the payrolls report, accompanied by a 0.1-hour slip in the work week. Additionally, downbeat ISM reports have led Barclays to lower its fourth-quarter GDP forecast to 1.5% annualized.

Although recent data have favored the Fed's stance, financial conditions have not followed suit. Barclays economists note that Chair Jerome Powell emphasized the importance of persistent developments, rather than just expected policy moves, in influencing rate decisions. However, recent developments contradict both conditions - the 10-year yield has retraced a significant portion of its increase since September's meeting, the stock market has rebounded, and the dollar has softened. This circularity loop puts the FOMC in a challenging position as policy-making based on tightening conditions undermines the very tightness it aims to achieve.

Market expectations, as indicated by the CME FedWatch tool, currently assign a 10% probability to another rate hike by December and a 16% chance of a move by February.

In light of these factors, U.S. stock futures have marginally increased (+0.16%) while the yield on the 10-year Treasury has risen by 7 basis points to 4.59%.

Telecom Italia Approves $20 Billion Sale of Fixed-line Network

Embraer Reports Profit in Q3

Leave A Reply

Your email address will not be published. Required fields are marked *

Related posts

DSW Capital Expects Flat or Lower Pretax Profit for Fiscal 2024
News

DSW Capital Expects Flat or Lower Pretax Profit for Fiscal 2024

DSW Capital projects a potentially lower adjusted pretax profit in fiscal 2024, as M&A deals continue to impact its fina...

Schrödinger Stock Prices Decline Following Lowered Outlook
News

Schrödinger Stock Prices Decline Following Lowered Outlook

Schrödinger, the physics-based computational platform company, sees a significant decrease in stock prices due to declin...

BMW Set to Report Second Quarter Results
News

BMW Set to Report Second Quarter Results

BMW is set to release its second quarter results, with analysts predicting higher revenues and earnings. However, the co...

Industrial Stocks Facing Short-Term Setback
News

Industrial Stocks Facing Short-Term Setback

Industrial stocks have faced a slight downturn after substantial gains, but experts believe it's an opportunity for inve...