The Jobs Report Reveals a Booming Labor Market. Here’s Where Interest Rates Are Headed.

Once again, a booming labor market is likely to translate to losses in bonds and stocks as the Fed and other major central banks remove the extraordinary stimulus enacted in response to the pandemic nearly two years ago. Any doubt of that was quelled on Friday with the report of a shockingly big rise of 467,000 in January U.S. nonfarm payrolls, several times the expected increase, defying the negative predictions of some economists in the wake of the Omicron variant. It was a “blowout jobs report,” wrote J.P. Morgan’s chief U.S. economist, Michael Feroli, albeit with a Roger Maris–style asterisk.

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