Bank of America just joined the growing crowd calling for a quarter-point rate cut at next Wednesday’s Fed meeting. In a note published Monday, analysts said their view shifted after several data points pointed to cooling in the labor market and a softer economic backdrop.
They highlighted four reasons for the call: the jump in the unemployment rate to 4.44 percent in the September jobs report, New York Fed President John Williams signaling support for a cut after that data, recent weakness in ADP and Beige Book labor readings, and the fact that Chair Jerome Powell has not pushed back on market expectations for a cut heading into the blackout period.
For anyone keeping score, markets were already there. Fed funds futures now show an 88 percent probability of a cut next week according to the CME FedWatch tool, up from 63 percent a month ago. Event contracts are reflecting roughly the same odds.think their playbook, and even aging nuclear plants are getting a second look.