Fed Rate-Cut Expectations Climb Following Weak Job Market Report

Disappointing employment data released Friday validated fears that the US labor market may be on the brink of a downturn and lifted expectations for how much the Federal Reserve will lower interest rates this year.

Investors are now fully pricing in a quarter-point rate cut at the Fed’s Sept. 16-17 policy gathering. They also pushed closer to anticipating a total of three rate cuts this year, according to futures contracts. Some Fed watchers said the weak jobs data could spur officials to consider a larger-than-typical half-point this month, though inflation data due next week could temper those expectations.

“There’s ...