Fed Timing Shifted as Inflation Risk Remains Live

The Federal Reserve's timing for its next move has been repriced following the soft nonfarm payroll (NFP) report in September. The probability of an October pause now stands at 77.9%, up from 35.8% a week earlier, according to the CME FedWatch snapshot.

However, despite this shift in timing, further tightening is still on the table. The bond market refused to treat the weak payroll growth as sufficient to overturn the larger inflation problem, with Treasury yields reversing higher by Friday's close and the Dollar Index holding its broader technical structure.

The energy crisis remains a major concern for the Fed, with Brent crude holding above $100 despite the coordinated G7 reserve release. This suggests that markets are repricing when the Fed moves next, rather than whether further tightening is still on the table.