Despite a decline in the market's initial reaction to non-farm payrolls and retail sales data, traders are still adamant that the Federal Reserve will cut interest rates twice in 2026. Due to the government shutdown, there are many restrictions on the delayed release of employment data, which also dampened optimism about employment growth that exceeded expectations last month. However, these data are not an obstacle to the current market's interest rate cut expectations, and the market's expectations are more dovish than the Federal Reserve's own position.

Despite a decline in the market's initial reaction to non-farm payrolls and retail sales data, traders are still adamant that the Federal Reserve will cut interest rates twice in 2026. Due to the government shutdown, there are many restrictions on the delayed release of employment data, which also dampened optimism about employment growth that exceeded expectations last month. However, these data are not an obstacle to the current market's interest rate cut expectations, and the market's expectations are more dovish than the Federal Reserve's own position.