Will strong US jobs data lead to interest rate cuts in March?

Later today, the all-important US payrolls report will be released, expected to showcase the health and strength of the US labor sector, which is crucial to determine the path ahead for monetary policies. 

The report will provide fresh odds for upcoming Federal Reserve interest rates cuts throughout 2024. 

It’s even more important following the Federal Reserve’s recent meeting minutes, which included more aggressive remarks than expected. 

The Fed 

The Federal Reserve’s December 13 meeting minutes showed that policymakers believe interest rates should remain high for an extended duration.

Members believe that interest rate cuts would be more appropriate by the end of the year.

The minutes showed a clearly cautious stance on inflation and interest rates and hurt the odds of multiple early US interest rate cuts this year.Advertistment

US Rates

Following the release of the Federal Reserve’s December meeting minutes, the odds of the first US interest rate cut in March 2024 fell to 65%.

Now investors await the crucial US payrolls report later today to gauge the likely path ahead for monetary policies. 

Payrolls Data

The US economy is expected to have added 168 thousand new jobs last month, down from 199 thousand in November, while unemployment are expected up to 3.8% from 3.7%. 

Obviously strong data will showcase the strength of the US economy and probably delay the timeline of interest rate cuts this year, underpinning the dollar, and vice versa. 

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