78% for December, and a jobs report that made good news expensive

The rate desk watched the same week as everyone else and drew a different line through it. Its line runs from Thursday’s Fed speeches to Friday’s payslips, and it ends at a December meeting.

The signal. On Thursday, Cleveland Fed president Beth Hammack and Richmond Fed president Thomas Barkin hinted at the possibility of further rate rises, Reuters reported; traders already expected a hike next month following the September rise². On Friday, October payrolls rose more than expected and the unemployment rate fell to 4.1%¹. LSEG data then put the chance of a December move at 78%, up from 70% earlier¹.

The quote that sums it up. “We’re worried about the Federal Reserve raising interest rates after the jobs report this morning,” said John Kilduff of Again Capital, speaking about oil⁵. Joe Saluzzi of Themis Trading asked the other half of the question: “Will the Fed want to raise interest rates in the face of a market which is teetering?”¹. Both are fair. Only one committee answers them, and it meets in December.

The yields. For all that, the week ended with lower yields. The ten-year Treasury fell to 4.86% from 4.94%, and the two-year to 4.51% from 4.56%³. Global Terminal notes that the two-year rose 0.05 point on Friday alone after the jobs report, but was still down on the week⁴. Safety demand from Thursday’s sell-off and a lower oil price pulled one way; a strong labour market pulled the other.

The dollar and the euro. The dollar index rose about 0.4% on the week and the euro slipped about 0.36% to roughly $1.1142, on Global Terminal’s late-Friday levels⁴. Gold rose 4.88% on the week to $4,065.90 on Comex³. For a euro saver, the dollar move is small; it matters mostly to what you pay for anything priced in dollars, from fuel to holidays.

For you. The figure to circle is Tuesday’s inflation print⁴. A hot reading would make the 78% look cheap; a soft one would give the committee room to wait. Either way, the decision belongs to a dull meeting with minutes, not to a trading screen. Nothing here is investment advice.