#Gate广场创作者新春激励 The Federal Reserve "Closes the Door on Rate Cuts"

On January 9th, Eastern Time, the U.S. Bureau of Labor Statistics (BLS) released the December 2025 Non-Farm Employment Report, which showed that the U.S. non-farm employment increased by 50,000 in December, below the expected 65,000, with a previous value of 64,000; the U.S. December unemployment rate was 4.4%, lower than the expected 4.5%, and the previous value was 4.6%. The Bureau of Labor Statistics stated that non-farm job additions in October 2025 decreased from a decline of 105,000 to 173,000; non-farm job additions in November 2025 were revised downward from 64,000 to 56,000. After revisions, the total downward adjustment for job additions in November and December 2025 was 76,000. Looking at the full year, U.S. employment increased by only 584,000 in 2025, the weakest growth since 2020, when employment sharply declined by 9.2 million due to the COVID-19 pandemic.
Nick Timiraos, known as the "Fed's Mouthpiece," stated that in 2025, private sector employers added an average of 61,000 jobs per month, marking the weakest period of private sector employment growth since the so-called "jobless recovery" of 2003.
Influenced by the lower-than-expected December 2025 unemployment rate, traders almost wiped out bets on rate cuts by the Federal Reserve later this month, maintaining a forecast of two rate cuts throughout 2026, with the first cut expected in mid-2026.
CME "FedWatch" data shows that the probability of a 25 basis point rate cut in January has fallen to 5%, while the probability of holding rates steady has risen to 95%. The probability of a cumulative 25 basis point rate cut by March is 29.6%, with a 69.1% chance of holding rates steady, and a 1.4% chance of a cumulative 50 basis point cut.
John Briggs, Head of U.S. Rate Strategy at Natixis North America, said, "For us, the Fed is more focused on the unemployment rate rather than noise in the overall data. Whether the Fed will cut rates further depends on the unemployment rate trend in the coming months."
Some analysts warn that the moving average data over the past three months shows a contraction of 22,000 people, which, even considering the reduced U.S. labor supply, is not a positive signal for future consumer spending. Brian Jacobson, Chief Economic Strategist at Annex Wealth Management, interpreted that December may mark a turning point in the U.S. labor market, with some signs of improvement beginning to appear, but this judgment remains highly uncertain.
Subadra Rajappa, Head of U.S. Rate Strategy at Société Générale, stated that the decline in the unemployment rate and rising wages provide even stronger reasons for the Fed to remain on hold in January.