Is January jobs data setting Fed up for rate cuts in June?

Yahoo Finance Video and Josh Lipton

Thu, February 12, 2026 at 6:27 AM GMT+9

After the release of January’s overwhelmingly positive jobs report on Wednesday, Numerator chief economist Leo Feler and Prime Capital Financial portfolio manager Clayton Allison come on Market Domination to discuss how they see the Federal Reserve’s interest rate strategy playing out this year, particularly as President Trump’s Fed nominee Kevin Warsh is currently set to head the central bank when Jerome Powell’s term expires in May.

To watch more expert insights and analysis on the latest market action, check out more Market Domination.

Video Transcript

00:00 Speaker A

as we look through this report. I wonder what the Fed makes of this report um in terms of cuts ahead, Clayton. So both the CME Fed Watch and Polymarket odds, they were at roughly 50% for a 25 basis point cut in June. Uh but Clayton, that that number has come down a bit after this morning’s report. I’m just curious to get your thoughts. What’s your base case for cuts, Clayton? What do you think in 2026?

00:23 Clayton

Yeah, I think it’s hard to say, especially as you have leadership turnover in the Fed with Warsch potentially coming in as long as that nomination goes through. You know, in June, especially with this updated report that just came out this morning, we’re seeing robust jobs, strong labor market, and if we continue to see moderating inflation, there’s not really a credence to be had for, you know, additional rate cuts coming up in June. Now, I could probably see, you know, one later on, but that is always data dependent as Chairman Powell likes to always say. But as that leadership turns over, we’ll just have to kind of wait and see as to the guidance that we get going forward.

01:03 Speaker A

Leon, what’s your take on that same question? What what do you how what’s your base case, Leon in 2026? How many how many cuts would you pencil in?

01:21 Leon

Yeah, I think we might get another 50 basis points of cuts, but again, there’s going to be so much data between now and June. Uh and so this is one jobs report. We’re going to get several others and several other inflation reports. There’s other data that we see about tariffs being passed through onto consumers. Um and so some, you know, potential pressure on inflation, uh you know, from tariffs working their way through. Uh and so, you know, we we still have a long ways to go. If anything, I expect the 50 basis points of cuts to happen toward the second half of the year, um with not much action right now during during this first half, given how well the the labor market is holding up.

Terms and Privacy Policy

Privacy Dashboard

More Info