The January jobs surprise is still rippling through the market.
Investors are reassessing their views on how quickly the Fed will continue hiking interest rates — and that was a drag on stocks last week.underpinned by the belief the Fed could pause its rate hikes as soon as May.
By the end of January, odds that the FOMC's target rate would climb to 5% at its May policy meeting had fallen to just 33% — from 79% back in November. That's according to the Fed funds futures market, where investors can bet on the Fed's next moves.when the January employment report showed blistering jobs growth just over a week ago.Expectations that the Fed funds rate will cross 5% in May soared right back up to about 80% over the last week.
The S&P 500, which had gained about 9% year to date before the jobs report, has shed 1.3% in the week since.As long as the Phillips Curve — economic shorthand for the way inflation and unemployment typically move in opposite directions —The next round of inflation data comes out Tuesday with the release of the January Consumer Price Index.
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