It may be cold outside, but that’s not enough to cool the scorching hot job market. The markets were shocked today when the change in nonfarm payrolls reported a gain of 517k, blowing out the estimate of 188k. The unemployment rate is now 3.4%, the lowest since 1969 while the ISM services index jumped to 55.2. The case for the Fed to make an early pivot seems to be fading as economic data remains strong and inflation lingers. Rates skyrocketed (US10Y 3.53%) on the backs of the job data. CME data now shows some traders are predicting a Fed terminal rate above 5% and others pushed their cut predictions back to December 2023.
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