Weekly Market Update: July 5, 2024
07/08/24
Market Adjusts Expectations for Fed Policy as Economic Data Softens
The case for rate cuts was strengthened following a series of soft economic data releases this week. The week’s economic reports included contractionary signals from key manufacturing and services indicators, jobless claims that exceeded expectations, and another increase in the unemployment rate. The unemployment rate now sits at 4.1% and has increased for three consecutive months. The disappointing economic data drove a repricing of market-implied rate cut odds. Futures pricing implies a 75% chance that the Fed cuts rates following the September FOMC meeting.
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