Weak September jobs report lowers odds of an October Fed hike
Traders treated the miss as a reprieve. Market-implied odds that the Fed will hold rates steady at its October 27-28 meeting jumped to 82.8%, according to CME Group’s FedWatch tool.
The 10-year Treasury yield, the benchmark lenders use to price home loans, fell about 6 basis points to 5.176% in early trading. It had touched its highest level since 2002 earlier in the week.
Michael Brenning, chief operating officer at eLend, says rapid swings in Treasury yields are forcing lenders to reprice loans multiple times a day, adding complexity to rate locks, margins, and borrower affordability.https://t.co/rjfKz690Ga
— Mortgage Professional America Magazine (@MPAMagazineUS) October 1, 2026
Why the case for an October hike is fading
“For the Fed, this number should be the nail in the coffin for an October hike,” Thomas Simons, chief US economist at Jefferies, said in a note.
Mike Fratantoni, senior vice president and chief economist at the Mortgage Bankers Association (MBA), reached a similar conclusion.
“With inflation still too high, the Federal Reserve is unlikely to cut rates anytime soon. However, these data showing a softer job market may be enough to keep the Fed on hold at their October meeting. Wage growth continues to run below the pace of inflation, which will hamper consumer spending over time.”
