As of the morning of Oct. 6, according to CME Group's FedWatch tool, market participants' pricing of fed fund futures indicated there is an 24% probability that the central bank will hike rates by 25 basis points at the next meeting, and a 76% probability it will keep rates unchanged.
The Fed's key short-term interest rate is now in a range of between 5.25% to 5.5%, after the central bank held rates steady at the Sept. 20 meeting.
Brad Conger, deputy CIO at Hirtle Callaghan & Co., said while the Fed still has the next consumer price index report to examine next week, the jobs report likely augurs "a November increase in the Fed Funds rate."
Hirtle Callaghan has $19 billion in assets under management.
Melissa Brown, head of applied research at Axioma, said that the robust jobs data "may be bad news for equity investors who have been hoping the Fed would pivot to a more accommodative policy." The report "may also signal upcoming earnings declines, as companies struggle to keep up with higher wages and financing costs," she added.
Candice Tse, global head of strategic advisory solutions at Goldman Sachs Asset Management, said the unexpectedly strong payrolls number showed that "while U.S. labor market softening has made incremental progress, the balance between supply and demand of workers will keep the Fed focused on managing inflation."
GSAM has $2.6 trillion in assets under supervision.