On Dec. 10, investors will have to contend with a double helping of event risk: The November consumer-price index report is scheduled to be released that morning, while the Federal Reserve will announce whether or not it has decided to cut interest rates again in the afternoon.
So, options traders are bracing for volatility — with premiums on option contracts tied to the S&P 500 SPX due to expire that day pricing in a 1.3% swing. That is the biggest implied move expected for the rest of 2025, according to a team of equity-derivative strategists at BNP Paribas.
Due to the longest government shutdown in U.S. history, it has been months since investors received key data reports on the state of the U.S. labor market. Economists at BNP Paribas estimated that long-delayed September jobs data could be released within days.
On Thursday, White House economic advisor Kevin Hassett said the October nonfarm-payrolls report could also be released soon, although the data likely will not include a reading on the unemployment rate.
A team of analysts at Citigroup said they expected the November jobs report to be released with only a slight delay. But it is possible investors might not receive another full report on the labor market before the Fed makes its decision on interest rates next month, the BNP team noted.
Comments from senior Fed officials pushing back on the likelihood of a rate cut next month have inspired investors to dial back expectations. Data from CME Group put the likelihood of another rate cut next month at just under 50% on Thursday.
During an interview with MarketWatch published on Thursday, Cleveland Fed President Beth Hammack said driving inflation back to the Fed’s target of 2% is critical for the central bank’s credibility. The Cleveland Fed’s NowCast inflation model puts the year-over-year inflation rate at around 3%.
The latest official U.S. reading, for the month of September, also put the rate at 3%. The CPI report for October has been delayed due to the recently resolved government shutdown.