Photo by Edbrown05, public domain, via Wikimedia Commons

Hi everyone,

Today Americans vote in the midterm elections, and by Friday morning we get the October jobs report. Two big answers in one week, and money markets have to sit right in the middle of both.

Quick take: The Fed held rates at 3.75% to 4.00% last week, but two officials wanted a hike. Growth looks strong, inflation is still above target, and hiring has gone soft. That mix is why this week feels so tense.

An election that moves more than politics

All 435 seats in the House are up for grabs today, Tuesday, Nov. 3, along with about one third of the Senate. I know, election talk can feel far away from daily prices. It is not, at least not this time.

Who controls Congress shapes tax plans, spending plans and how much new debt the Treasury has to sell. Bond buyers care about that a lot. The Treasury shares its borrowing plan this week too, so politics and borrowing costs land on the same desk, on the same days.

The Fed is split, and the numbers explain why

Last week the Federal Reserve kept its main rate at 3.75% to 4.00%. That part was expected. The split was the story. Two members voted for a small hike of 25 basis points instead, because they worry inflation will stick around.

Look at the data they are staring at. The US economy grew at a 3.4% yearly pace in the third quarter, up from 2.2% in the second quarter. That is not a weak economy. At the same time, core PCE inflation, the measure the Fed watches closely, rose to 3.1% for the year. The wider PCE reading for September was 3.6%.

So growth says hold steady or even go higher. Prices say do not relax yet. No wonder the room is divided.

Hiring is the soft spot

Here is the part that worries me more. September added only 29,000 jobs. That is a tiny number for the US. Older months were also revised down, which makes the trend look worse, not better.

On Friday, Nov. 6 at 8:30 a.m. Eastern, we get the October report. Most forecasts I saw sit around 50,000 to 55,000 new jobs, with unemployment near 4.2%. A strong surprise could push bond yields up again and make a December hike look more likely. A weak one does the opposite, but it also raises a harder question about where growth is really heading.

Big earnings sit between the two events

It is not just politics and data. AMD reports today, and Qualcomm follows on Wednesday. These are not small names. Their results, and what bosses say about spending on chips and AI, can move the whole tech side of the market.

Bond markets are already on edge. The 10 year Treasury yield ended last week near 4.94%, and the 30 year sat at 5.31%. Crypto linked stocks felt the stress too. Coinbase touched a 52 week low on Friday, and Circle reports on Wednesday. When yields stay this high, risk assets usually feel it first.

My bottom line

This week is not about one headline. It is about a chain. Election result first, then borrowing plans, then jobs. Each step can change what people expect the Fed to do on Dec. 9, and that expectation is what moves stocks, bonds, the dollar and crypto at the same time.

I am watching Friday more than Tuesday, to be honest. Voters can surprise us, sure. But a jobs report that is far from 50,000 will force traders to rewrite their rate-cut hopes.

What are you watching more this week, the election result today or the jobs number on Friday?