Fed seen holding rates next month after U.S. posts third-largest monthly job loss since 2020

A sharp deterioration in US labor data is shifting expectations toward the Fed pausing rather than hiking next month. That reprices the front end of the rates curve lower, eases financial conditions, and typically pressures the US dollar while supporting duration and risk assets. Near-term market focus will shift to how quickly policy expectations converge on cuts versus a prolonged hold, increasing sensitivity to upcoming inflation prints.