NEW YORK (Reuters) – Futures on the federal funds rate, which track short-term interest rate expectations, on Friday has priced in a quarter-point tightening by the Federal Reserve either by November or December next year despite a U.S. payrolls report that came in way below expectations.
The fed funds market showed a more than 94% chance of a rate hike by November 2022, fully pricing that scenario in December next year. That was more or less the same before the release of the payrolls report.
Data showed that the U.S. nonfarm payrolls increased by just 194,000 jobs last month, underwhelming forecasts for an increase of 500,000 new jobs.
(Reporting by Gertrude Chavez-Dreyfuss)