Viewpoint: Recent U.S. employment data is "concerning," and the Federal Reserve has reason to implement "insurance-style" rate cuts next year

According to UBS analysis, the employment data released this week reveals potential weakness in the U.S. labor market, which could serve as a basis for the Federal Reserve to further cut interest rates early next year. UBS Chief Economist Paul Donovan noted in a report to clients that this data "raises multiple alarm bells." Due to the government shutdown exacerbating the low response rate of the Bureau of Labor Statistics survey, the quality of the data itself should be treated with caution.

Elyse Ausenbaugh, Chief Investment Strategist at Morgan Wealth Management, agrees that the October data is particularly "disturbing." She stated that this report reinforces the market's view of the Federal Reserve's current policy path. The "insurance-style" rate cuts over the past few months have been a prudent move, bringing rates back to a more neutral level. She believes that another rate cut in the first quarter of 2026 may be appropriate, but the economy is currently stable, and the Federal Reserve has the patience to observe subsequent actions. (Golden Ten)