Hot Payroll Number

June 5, 2023

Hot Payroll Number Photo

Friday’s employment report demonstrated a very resilient job market, defying bearish sentiment calling for an imminent recession.1 Good news was treated as good news, with equities and credit spreads rallying. The idea that this news would increase the probability of the Federal Reserve (Fed) raising rates at its upcoming June meeting was treated as a secondary consideration for the time being.

Treasury rates moved higher on Friday, with the 2-year and 10-year yields up approximately 80 basis points (bps) and 40 bps, respectively, since early May. Whether the Fed pauses rate hikes or not in June, market expectations for rate cuts in the latter part of the year have clearly diminished.       

The week ahead is light on economic releases, with all eyes looking to next week’s Fed meeting.2      



1CNBC – Payrolls rose 339,000 in May, much better than expected in resilient labor market; 6/2/2023

2MarketWatch – U.S. Economic Calendar; as of 6/5/2023

Tags: Federal Reserve | Employment Report | Job Market | Equity market | Credit spreads | Interest rates

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