Analyst: Non-farm data will make the Federal Reserve more cautious, next week's CPI data will be even more important

On January 10, Jack Mcintyre, portfolio manager at Brandywine Global, stated that the strong performance of the November non-farm report made people doubt whether the Federal Reserve would further cut interest rates in the first half of 2025. The December non-farm report provided further evidence to the Fed: 1. They made a policy mistake when they cut interest rates by 100 basis points at the end of last year; 2. They will become more cautious in implementing future rate cuts. The longer the Fed pauses, the more likely their next move is to start raising rates. While labor conditions are important, inflation remains key for both Fed and market considerations. Next week's CPI data will be even more significant.