Expect "Sizeable Revisions" in Jobs Data, Inflation Gives FOMC Little "Room to Run"

Economic Indicators - The upcoming September jobs report is expected to show a gain of approximately 50,000 jobs, which could significantly impact the bond market depending on the accuracy of the data [2][3] - There is an anticipation of sizable revisions to the jobs data due to the rapid collection process, indicating that the report may not fully reflect the current economic conditions [3] Federal Reserve Policy - The Federal Reserve is likely to maintain its current interest rates in the next meeting, with potential cuts not expected until early 2026, as inflation remains high at around 3% while the unemployment rate hovers near 4.5% [5][6] - The Fed's dual mandate of managing inflation and supporting the labor market is creating tension, as the labor market shows signs of slowing down [6][7] Corporate Debt and AI Sector - There has been a significant increase in bond issuance by major AI tech companies, raising concerns about the overall level of corporate debt, especially given the low credit spreads [9][10] - The focus is shifting towards lower-rated companies and those in the high-yield market, which may struggle to service their debt as the overall debt burden increases [10][11] - The market is expected to demand higher yields relative to treasuries to compensate for the rising risk associated with high levels of corporate debt [11][12]