Last week’s economic data signaled a clear softening in the U.S. labor market, reinforcing expectations that unemployment will rise gradually rather than abruptly. Hiring slowed meaningfully, job openings declined, and layoff announcements surged.
ADP reported just 22,000 jobs added in January, with job growth near zero excluding healthcare and education. JOLTS showed openings falling to 6.5 million—nearly one million fewer than a year ago—led by professional services, retail, and finance. Challenger announced 108,000 job cuts, the highest January total since 2009, while ISM Services pointed to continued labor softness alongside sticky service-sector inflation.
Rates moved lower in response, with yields down roughly 6–8 basis points across the curve. Two Fed cuts are firmly back on the table this year, though the market still prices the SOFR trough above 3%. Inflation remains sticky enough to keep the Fed cautious, but April cuts are increasingly plausible if CPI drifts toward the mid-2% range.
Curve dynamics remain mixed, with mild inversion in the 1–2-year sector but continued overall steepening. Given elevated volatility and limited conviction on rate direction, the environment favors risk management over rate timing—particularly for floating-rate borrowers.
In other markets, the dollar remained weak, supporting U.S. exports, while crypto faced pressure and agency markets were largely unchanged. Commercial real estate conditions remain segmented: liquidity persists for higher-quality assets, lenders remain accommodative, and distressed multifamily interest continues to build without triggering widespread forced sales.
Looking ahead, January payrolls and CPI will be key catalysts for near-term rate expectations.
Jake Tillman, Senior Analyst
Jake Tillman is a Senior Analyst, Capital Markets at Defease With Ease | Thirty Capital, bringing 5+ years of experience specializing in financial modeling, debt structuring, and risk analysis for CRE transactions. He supports the execution of financing strategies, including CMBS, as well as interest rate hedging and capital markets transactions. With expertise in cash flow modeling, credit risk assessment, and market analytics, he provides data-driven insights to optimize capital structures and manage interest rate exposure. Jake assists in scenario analysis, transaction execution, and risk assessments, ensuring alignment with market conditions and client objectives. His technical background includes financial modeling, Bloomberg analytics, and structured finance evaluation.
