“Extremely Hawkish”: Stocks, Bonds, Gold Puke After ‘Good’ Jobs Data; Rate-Hike Odds Soar

“Extremely hawkish,” says Dennis DeBusschere, founder of 22V Research.

‘Good’ news on the labor market (lowest unemployment rate since 1969… after 450bps of rate-hikes?!) is a disaster for the ‘soft landing’ narrative and sent rate-hike expectations soaring above pre-Powell levels…

Source: Bloomberg

Bloomberg Intelligence Chief US Interest Rate Strategist Ira Jersey says the much stronger-than-expected payrolls report may finally be the data point that convinces the market the Fed won’t be cutting this year.

“As such, we think the long-end range may once again be re-tested with the 10-year Treasury topping 3.75% again, but we think a more pronounced selloff unlikely. Meanwhile a re-test of 4.4% on the two-year note seems possible if 2023 rate cuts are priced out.”

This sent stocks tumbling…

And bond yields are soaring back to pre-Powell levels…

Gold tumbled back to $1900…

“Is Powell now wondering why he didn’t push back on the loosening in financial conditions?” asks Seema Shah, chief global strategist at Principal Asset Management.

“It’s difficult to see how wage pressures can possibly soften sufficiently when jobs growth is as strong as this and it’s even more difficult to see the Fed stop raising rates and entertain ideas of rate cuts when there is such explosive economic news coming in.”

The only thing flying high is the dollar…

Source: Bloomberg

Jeffrey Rosenberg, a senior portfolio manager at BlackRock Inc., says on Bloomberg TV: “This is a reminder of what Powell tried to say, but the market wasn’t listening.”