John Hancock: Weekly Market Recap Week Ended September 5

Fed rate outlook

Friday’s jobs report lifted expectations among bond traders that the U.S. Federal Reserve is likely to cut its benchmark rate by a quarter point on September 17, with an outside chance of a steeper half-point cut. As of Friday afternoon, prices in rate futures markets implied an 86% probability of a quarter-point cut and a 14% chance of a half-point reduction, according to CME FedWatch. For more details, explore the latest thinking from our co-chief investment strategists here.

Yield volatility

Shifting narratives about the outlook for interest rates and tariffs made for a bumpy week in fixed income. Overall, U.S. government bond prices climbed, sending yields sharply lower. The 10-year Treasury’s yield climbed as high as 4.31% on Tuesday before settling down to 4.09% at Friday’s close.

Gold shines

The price of gold futures rose for the third consecutive week and set a fresh record high of as much as $3,655 per ounce in Friday afternoon trading—up more than 36% year to date. Much of the week’s gain came after Friday morning’s release of weaker-than-expected jobs data.

CPI report ahead

A Consumer Price Index report scheduled to be released on Thursday will provide one of the last major data points for the U.S. Federal Reserve as it considers cutting its key interest rate by either 25 or 50 basis points at a meeting ending September 17. The most recent CPI report released in August showed that inflation held steady at a 2.7% annual rate in July.

SOURCE: https://www.jhinvestments.com/weekly-market-recap#market-moving-news