Bank of America (BofA) has weighed in on the recent jobs report, cautioning that despite the data, a 50 basis point (bps) rate cut by the Federal Reserve in November should not be fully ruled out. The report highlights key considerations for the market and policy outlook amid the Fed’s rate-cutting cycle.
Key Points from BofA:

Labor Market Data: The latest U.S. jobs report presented a mixed picture, with job creation numbers moderating, yet unemployment rates remained relatively steady. While this data suggests some cooling in the labor market, it might not be enough for the Fed to pull the trigger on a 50bps rate cut in November, according to BofA.

Fed’s Policy Approach: Despite the latest employment figures, the Federal Reserve may still have room for more aggressive rate cuts, especially if inflationary pressures ease and economic growth shows further signs of slowing down. This underscores the fluidity of the Fed’s decision-making as it navigates a challenging economic landscape.

Inflation and Growth Balance: The central concern for the Fed is balancing inflationary control with the need to support economic growth. With inflation appearing more under control and the labor market showing signs of cooling, there may be room for more significant policy easing in the near term.

BofA’s Outlook: BofA believes that the Fed’s decision will be heavily influenced by upcoming data, particularly in the areas of inflation and consumer spending. Therefore, while a 50bps cut is not the base case, it cannot be entirely discounted given the evolving economic conditions.

As investors analyze these developments, tools such as the Economic Calendar API can provide timely access to crucial macroeconomic data that may impact Fed policy decisions.