Traders Raise December Fed Rate-Hike Bets After Strong Jobs Report

Traders increased the odds of a Federal Reserve rate hike in December after U.S. payrolls rose by 165,000 in October, a shift in rate expectations relevant to crypto and broader markets.

Interest-rate futures implied about an 80% chance of a 25-basis-point increase at the Fed’s December meeting, up from roughly 75% before the report. Short-term rate futures fell after the release.

October payroll gains were spread across several industries, with professional and business services and health care among those with the largest increases. The unemployment rate fell to 4.1%, while employment totals for the previous two months were revised upward.

Hiring has varied from month to month, but the overall pace remained strong enough to keep unemployment low. Consumer spending and business investment supported demand and company profits this year, encouraging businesses to add workers.

The Fed raised rates in September and left them unchanged in October. Before its next meeting in December, officials will receive another jobs report and a full set of inflation data.