The U.S. bureau of labour statistics published the unemployment rate yesterday. The expectation was 4.2%, and it came better than expected at 4.1%. That was not well received by the market, simply because it gives the Fed another reason to take a pause in lowering rates. Inflation is up and unemployment is down, which for a data-dependent Fed means there is no need for further action at this point. And the market has also priced in that narrative: the probability of no change in rates at the January 29th Fed meeting is 97%. The overall scenario is getting clearer and at this point, the signal to the market is, you’re on your own; no tailwinds from the Fed, and according to comments from officials on the new administration, no tailwinds on the fiscal side either, at least monetary. To be seen, is the impact that eliminating excessive regulations will have on U.S. corporations.
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