🚨 Just saw the December NFP drop and damn, January rate cut window basically slammed shut 😅
Market was still pricing in a decent chance for one more cut end of month, but after the data: only +50k jobs (super weak), plus -76k downward revisions to the last two months… yet unemployment dipped from 4.6% → 4.4%.
That little drop killed the “labor market is collapsing” narrative the doves were riding.
What the Fed really hates is the combo of rising unemployment + sticky inflation (that would force their hand hard). When jobless rate actually goes the other way (down), staying on hold suddenly looks way safer and more reasonable.
The weird mix right now: hiring clearly slowing, but participation stuck at 62.4%, wages still climbing (+0.3% MoM / +3.8% YoY), healthcare & leisure still adding jobs while retail/construction/manufacturing bleed.
Annual pace of job gains is definitely cooling, but not crashing hard enough yet to make the Fed panic.
Result? Market just nuked January cut odds — basically 0% now in swaps/CME. First cut vibes shifted to mid-year territory, and 2026 still looking like mostly 2 cuts total.
Logic is simple: unemployment ticking lower + wages holding firm = no emergency button needed. Fed gonna sit tight, watch next inflation & jobs prints, and not risk waking inflation expectations with a premature cut.
wild times 🚀📉
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