Fed funds futures are modestly higher after rebounding from early losses
Fed funds futures are modestly higher after rebounding from early losses. There wasn't clear direction from the jobs report, but shorts are covering after taking out some insurance against a strong jobs number that would have all but "guaranteed" a rate hike and might have upped the risk for a November tightening. Despite the bounce in futures, implied rates are still suggesting nearly a 65% chance for the FOMC to pull the trigger at the December 13, 14 policy meeting. Action as soon as the November 1, 2 meeting seems unlikely after today's data, and with potential instability in the money markets after the new reforms go into effect on October 14. And even though Fed officials claim they are apolitical, it's unlikely they would think tightening rates a week before the presidential election on November 8 would be a good idea.