August Jobs Surprise Fed Rate Path Simulator

Labor Data Levers LIVE CALIBRATION

Reported Payrolls (NFP) 245k

50k (Stall) 165k (Consensus) 350k (Boom)

Unemployment Rate (U3) 4.1%

Avg Hourly Earnings (MoM) 0.4%

Transmission Mechanism

Hawkish Recalibration

1 Payrolls beat expectation (+80k), dampening economic slowdown fears.

2 Front-end yields spike (+14 bps), pricing out jumbo 50 bps easing.

3 Equities wobble (-0.85%) under higher-for-longer discount rates.

Payrolls Surprise

+80k

vs 165k Consensus

25 bps Cut Odds

74%

Base Case (Prior 58%)

50 bps Cut Odds

Diminishing (Prior 38%)

Hold / Pause Odds

18%

Tail Risk (Prior 4%)

2Y Yield Delta

+14 bps

Front-End Repricing

S&P 500 Reaction

-0.85%

Valuation Drag

Next FOMC Meeting Probabilities Fed Funds Futures Implied

25 bps Cut (Gradual Easing) 74%

50 bps Cut (Jumbo Easing) 8%

Hold / Unchanged (Hawkish Pause) 18%

Dual-Mandate Focus

Resilient hiring diminishes urgency for aggressive 50 bps easing, reinforcing higher-for-longer policy rates.

Treasury Yield Curve Shift (2Y vs 10Y) 2Y/10Y Spread: -12 bps

FOMC Policy Stance & Terminal Path Projection HAWKISH CALIBRATION

Resilient hiring diminishes urgency for aggressive 50 bps easing, reinforcing higher-for-longer policy rates.

Terminal Rate Estimate: 3.85%

Projected 2026 Total Cuts: 75 bps

Market Volatility Index (VIX): 17.2

Dollar Index (DXY): 103.8