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Traders bump up bets on Fed rate cuts to shore up labor market

BY Reuters | ECONOMIC | 09/11/25 08:55 AM EDT

Sept 11 (Reuters) - Concern about a softening job market will keep Federal Reserve policymakers on course to resume cutting interest rates next week, though a stronger-than-expected rise in consumer inflation in August looks likely to prevent them from delivering a super-sized rate cut to start.

That was the bet in short-term interest-rate futures markets Thursday after a government report showed jobless claims rose sharply last week. Rate futures pricing now reflects bets on three straight quarter-point Fed rate cuts, one at each meeting left this year, starting with the Fed's September 16-17 meeting. (Reporting by Ann Saphir; Editing by Aidan Lewis)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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