Will the rise in unemployment rate hinder the Federal Reserve's pace? New developments in January rate cut probability

【BlockBeats】U.S. November employment report released, with the unemployment rate rising to 4.564%, an increase of 12 basis points month-on-month. What does this number mean? According to Wall Street observers, the current softening trend in the job market is becoming apparent.

Last week, Powell also emphasized that the Federal Reserve’s policy stance would keep the unemployment rate stable, or at most increase by one or two more basis points. And this new employment report seems to be heading in that direction. Interestingly, this data actually supports the Fed’s previous decision to cut interest rates—indicating that the earlier policy adjustments were correct.

However, this does not necessarily mean that rate cuts will continue in January. Market reactions are mixed. The U.S. interest rate futures market shows that traders still expect two rate cuts in 2026. But expectations for January have changed significantly—the probability of a 25 basis point rate cut in January has risen from 24.4% to 31%. Although this is a notable increase, overall, a 31% chance remains relatively low, indicating that the market believes the Fed is more likely to hold steady in January.

In simple terms, employment data is improving but not enough to be strong, giving the Fed more room to wait.