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MNI US Macro Weekly: Waller & Payrolls Conspire Against Pause

The November payrolls report saw the unemployment rate surprise higher again but some caution on the speed of cuts ahead
USCentral Bank NewsHomepageFederal ReserveMarketsStoryNorth America

MNI (LONDON) - Executive Summary

  • The November payrolls report didn’t have enough signs of strength to warrant a pause from the Fed later this month and accordingly Fed Funds futures have shifted to pricing 22bp of cuts vs 18bp prior.
  • It built on a softer than expected ISM services report on Wednesday even if it was from a strong base.
  • Fed Governor Waller on Monday gave about as explicit an indication as we've received that the base case for the FOMC is to cut again.
  • CPI will have to be extremely strong on Wednesday to see a pause back on the table along with a blackout period steer. Consensus eyes core CPI at a solid 0.3% M/M in Nov after 0.28% in Oct and 0.31% in Sept.
  • Combined with the unemployment rate increasing in November but still on track for a sizeable undershoot of median FOMC forecasts, and only just meeting the Q4 forecast of the most hawkish FOMC members, and there has been calls by some for a gradual approach to cuts beyond.  

PLEASE FIND THE FULL REPORT HERE: US week in macro_241206.pdf

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MNI (LONDON) - Executive Summary

  • The November payrolls report didn’t have enough signs of strength to warrant a pause from the Fed later this month and accordingly Fed Funds futures have shifted to pricing 22bp of cuts vs 18bp prior.
  • It built on a softer than expected ISM services report on Wednesday even if it was from a strong base.
  • Fed Governor Waller on Monday gave about as explicit an indication as we've received that the base case for the FOMC is to cut again.
  • CPI will have to be extremely strong on Wednesday to see a pause back on the table along with a blackout period steer. Consensus eyes core CPI at a solid 0.3% M/M in Nov after 0.28% in Oct and 0.31% in Sept.
  • Combined with the unemployment rate increasing in November but still on track for a sizeable undershoot of median FOMC forecasts, and only just meeting the Q4 forecast of the most hawkish FOMC members, and there has been calls by some for a gradual approach to cuts beyond.  

PLEASE FIND THE FULL REPORT HERE: US week in macro_241206.pdf