• Hints on the labor market were provided by Federal Reserve (Fed) officials who shared views that the market is not dire despite slow job growth.
• Barkin noted that businesses are managing headcount through attrition or slowing hiring, but not laying people off, indicating cautious but not panicked market behavior.
• Schmid reaffirmed that inflation is almost within the required range and that the strength of the economy will determine the policy path.
• Goolsbee, however, warned that it's important to determine whether the job market cooling is a temporary or ongoing event.
• The weekly jobless claims data also helped calm markets, with initial claims coming in lower than expected at 233K versus an expected 240K.
• Market pricing suggests less than 10% odds of an immediate cut and around 80% odds of a cut in September. These estimates indicate that markets are still fully pricing in 100 basis points of Fed easing by year-end, as well as 175-200 points of total easing over the next 12 months.