CIBC: Weak US jobs data could prompt the Federal Reserve to cut interest rates earlier next year.

CIBC points out that the non-farm payroll data reflects further weakness in the US labor market, while on the other hand, more resilient consumption indicates that demand remains quite favorable. Overall, this could prompt Fed policymakers who disagreed at the last meeting to reassess their stance, increasing the likelihood of an earlier rate cut in 2026. That said, Goolsby and Schmid were two major opponents who called for keeping rates unchanged last week, but they will be leaving their voting seats next year, likely to be replaced by Hamack and Logan, who are likely to be more hawkish. Therefore, changing their minds and convincing them to cut rates will be a difficult task. However, the cooling labor market will continue to weaken their resolve, as the balanced data evidence diminishes the Fed's case for maintaining rates. Therefore, the possibility of the Fed easing monetary policy earlier than 2026 is increasing. (Jinshi)