WEAK US JOBS DATA CUTS ODDS OF OCTOBER FED RATE RISE

Traders have sharply reduced their expectations that the US Federal Reserve will raise interest rates again in October, after official figures showed the world's largest economy added just 29,000 jobs in September, far below forecasts of more than 80,000. CME Group's FedWatch tool, which tracks trading in 30-day interest rate futures, put the chance of a quarter-point rise at 17%, down from around 36% a week earlier. On the prediction market platform Kalshi, the odds of an October rise stood at 18%, compared with almost 70% a week before. The figures followed a separate reading on Wednesday of the personal consumption expenditures price index, the Fed's preferred measure of inflation, which also came in softer than expected. Core prices, which exclude food and energy, rose 3% in August, below consensus forecasts of 3.3%.

The Fed raised interest rates at its September meeting in an effort to address inflation that official data shows has remained above target for five years. Under its dual mandate, the central bank is required to balance full employment against price stability, and a weaker labour market could alter how it weighs that balance. Investors are still pricing in a rate increase in December, according to market data cited in the report. Adam Schickling, a senior economist at Vanguard, said the jobs report "strengthens the case for the Federal Reserve to remain patient." Bloomberg reported that stocks and bonds rose as the weaker jobs data curbed expectations of a near-term rate increase.

No date has been given for the Fed's next policy decision beyond the reference to a possible December move, and officials have not issued new public comment beyond the market-based odds reported by trading platforms. The shift in rate expectations reflects investor positioning rather than any new Fed statement, and figures could change ahead of further economic data releases. Markets will continue to watch forthcoming employment and inflation reports for signs of how the central bank's dual mandate assessment develops. No official Fed statement responding directly to the September jobs figures was included in the reporting.