Odds have swung heavily in favor that the Federal Reserve will cut interest rates again at the end of this month even with Friday’s news that the U.S. unemployment rate dropped to a 50-year low of 3.5% last month. Central bankers are focused on the risks to future outcomes and will tend to pay less attention to lagging indicators such as the unemployment rate as they consider their next move. Thinking more broadly, the data overall is not showing enough strength to justify a holding rates steady.
