At the same time, Treasury yields slipped, with the 2-year at 3.60% and the 10-year at 4.14%, signaling a more cautious bond market.

Fed Signals Reinforce Reduced Easing Expectations

The CME FedWatch Tool now shows a 46% probability of a 25-basis-point cut in December, down from 67% a week earlier. This adjustment follows a series of measured comments from Federal Reserve officials.

Kansas City Fed President Jeffrey Schmid said policy should continue to “lean against demand growth,” describing current rates as “modestly restrictive.” St. Louis Fed President Alberto Musalem added that rates are now closer to neutral, cautioning that there is limited room to ease without creating broader risks.

These remarks have tempered expectations for rapid policy shifts and kept investors hesitant to price in earlier cuts.

Market Awaits Delayed US Economic Releases

Attention is now turning to upcoming US data releases delayed by the recent government shutdown. The September Nonfarm Payrolls report is due on November 20, but gaps remain for several October indicators.

National Economic Council Director Kevin Hassett cautioned that some October data may not be recoverable, leaving markets waiting for clearer signals on the Fed’s next steps.