Core Viewpoint - The upcoming economic data releases will significantly influence the debate regarding the Federal Reserve's interest rate cuts, particularly in light of the recent government shutdown and its impact on data availability [1][2]. Economic Data Impact - The delayed announcements of monthly employment and inflation figures are expected to clarify whether the Fed is nearing the end of its easing cycle after three consecutive cuts or if further aggressive actions are necessary [2]. - The labor market's performance, particularly the employment figures, is deemed crucial for determining future interest rate movements [3]. Market Expectations - Bond traders are anticipating two rate cuts next year to bolster the job market and economic growth, despite persistent inflation [2]. - Current market expectations suggest that another rate reduction is not fully priced in until mid-year, with a potential second cut in October [6]. Treasury Yields - As of the latest data, the two-year Treasury yield is approximately 3.5%, while the 10-year yield stands around 4.2% [5]. - Yields have recently decreased from their peaks following comments from Fed Chair Jerome Powell regarding concerns over weaker hiring [5]. Job Market Insights - The economy is projected to have added around 50,000 nonfarm jobs in November, following a reported gain of 119,000 jobs in September, which exceeded estimates [7]. - The unemployment rate has risen to 4.4%, marking the highest level since 2021, indicating potential weaknesses in the labor market [7].