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2026-11-06 09:30:26
[Non-farm payrolls report may trigger Fed rate hike repricing] (1) AAStocks reports that the October non-farm payrolls report released on Friday may trigger the market to repric the Fed's rate hike path; the futures market shows that the probability of a rate hike at the next meeting is close to 80%, and its impact may continue until the November employment report is released in early December. (2) If the employment data is strong, the Fed can focus more on controlling inflation, and the market may need to re-evaluate the currently expected two additional rate hikes. (3) Analysts predict that non-farm payrolls will increase by 65,000 in October (compared to 29,000 in September), the unemployment rate will remain at 4.2%; wages will rise by 0.3% month-on-month and 2.9% year-on-year; and weekly working hours will remain at 34.4 hours. The total pay index has stabilized since bottoming out in December 2025, indicating that the slowdown in the labor market and wages has stabilized. (4) Although wages and new jobs have slowed, they are still in line with the 4% to 5% annual growth before the pandemic; the problem is that high inflation is weakening real wages, and the Fed needs to focus more on its inflation mission. (5) If the unemployment rate does not rise sharply and the number of new jobs does not fall unexpectedly, the market's view on the policy path is expected to remain unchanged; if the data far exceeds expectations and the unemployment rate falls significantly, it may increase the probability of a rate hike in December and lead to earlier or more rate hikes. (6) The market currently expects one rate hike in December, another in 2027, and the rate hike cycle to end in 2027; if the October and November reports are both strong, the market will worry that there will be more than two rate hikes.
