Not So Fast – October 2024

Last month, the Federal Reserve began what is expected to be a series of interest rate cuts as it moves towards a neutral policy stance. They chose to not only cut the Fed Funds rate by 0.50%, but the latest Summary of Economic Projections now shows a more aggressive rate cut path than it previously had. In fact, expectations had swung so far that there was talk of another 0.50% cut to the Fed Funds rate in November. Then, on Friday, October 4, 2024, the September labor report showed non-farm payroll gains far exceeded expectations, adding 254,000 jobs in September, surpassing the 150,000 estimated. This caused the unemployment rate to tick down 0.1% for the second consecutive month and now sits at 4.1%. While this move may not seem significant, it does call into question the path of rate cuts.