NY Fed survey finds layoff fears at Covid-era high as rate-hike bets fade

Layoff anxiety just hit its highest mark since the Covid-19 market crash. The New York Federal Reserve's newest survey shows the perceived probability of higher unemployment over the next year climbed 1.4 percentage points to 45.3%, per Crypto Briefing. That's the steepest reading consumers have logged in years.

Inflation expectations, meanwhile, didn't budge. The one-year outlook sat at 3.9% and the three-year view at 3.3% — both well above the Fed's target. Consumers are pricing in both a weaker job market and stubbornly sticky prices at the same time.

Prediction markets took note. The contract on whether at least one Fed rate hike lands in 2026 saw its implied probability drop from 24% to 20.5% over a 24-hour stretch, according to Crypto Briefing. Traders appear to be reading the souring jobs mood as a sign of cooling activity rather than a reason for tighter policy.

Next up: unemployment figures, fresh inflation reports and the FOMC's coming meetings. Any comments from key Fed officials will get the same scrutiny. Moves that show activity stabilizing — or sliding further — would fit the scenario where the Fed holds off on more hikes.