The market rally, which accompanied the Federal Reserve Chair Jerome Powell’s narrative of the beginning of the “disinflationary process,” fizzled out due to an estimate-crushing addition of 517,000 jobs in January.
The latest employment data echoed Mr. Powell’s concern regarding an “out of balance” labor market and stoked investors’ concern best summed up by the Fed Chair himself, “So if we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more than is priced in.”
