- Stocks rose and bond yields fell as signs of cooling in the labour market and services reinforced the notion that the Federal Reserve is done raising rates, while increasing bets on rate cuts as soon as June.
- Superlatives piled up all over Wall Street on Friday, with the S&P 500 rising about 1% and posting its best week since 2023. The VIX, the market's "fear gauge," fell the most in five days in 21 months. Treasury yields rose across the yield curve, with two-year yields falling 16 basis points to 4.83%. The dollar has dropped the most since July. Oil has fallen below $81 per barrel.
- Fed swaps now show that traders see only a 16% chance of another hike in January and have fully priced in a cut in June - rather than July. The service sector in the United States expanded at the slowest rate in five months, job growth slowed, and the unemployment rate rose to 3.9%. After a downwardly revised 297,000 increase in September, nonfarm payrolls increased by 150,000 last month. Wage increases have slowed.
- Policymakers, according to Fed Bank of Atlanta President Raphael Bostic, have time to watch how the economy evolves and be patient when it comes to interest-rate moves. While a slowdown in hiring is welcome news for the Fed, Minneapolis counterpart Neel Kashkari cautioned against overreacting to a single month of data. Richmond Fed President Thomas Barkin expressed similar sentiments about the latest job data, saying that his decision on whether to hike again will be influenced more by inflation data.
