The conventional wisdom among economists and traders is that the Federal Reserve is going to cut its benchmark interest rate by another quarter of a percentage point on Dec. 18, and then pause at its first meeting in 2025.

The U.S. Federal Reserve was locked in a battle with soaring inflation throughout 2022 and 2023, which prompted the central bank to rapidly increase the federal funds rate (overnight interest rates). That triggered a steep climb in interest rates, including the 30-year fixed mortgage rate, which hit a two-decade high of 7.8% toward the end of 2023.

The Federal Open Market Committee is most likely to cut interest rates again on December 18 to 4.25% to 4.5%, according to fixed income markets.

The dollar was edging lower as investors bet on the Federal Reserve cutting interest rates further this month, Swissquote Bank analyst Ipek Ozkardeskaya said in a note. Friday's nonfarm payrolls data

For many investors, Friday's jobs report confirmed expectations that the Federal Reserve is on track to cut interest rates

In her first major policy speech, Federal Reserve Bank of Cleveland President Beth Hammack said on Friday she’s keeping her options open when it comes to the central bank’s next policy meeting, as broader economic conditions continue to argue for a slowdown in the pace of rate cuts.

Friday's jobs report virtually cements that the Federal Reserve will approve an interest rate cut when it meets later this month.

The Federal Reserve will almost certainly slash interest rates at its December meeting. Friday’s jobs report sealed the deal, offering the Fed enough breathing room to act without looking reckless. Nonfarm payrolls rose by 227,