“Wages were up, the number of people looking for jobs dropped, and both those things point toward a stronger consumer, and potentially stronger corporate profits driven by that stronger consumer,” Eric Shenker, head of U.S. equity trading at Mizuho Securities USA, told the Wall Street Journal. “So it bodes well for the economy.”
Along with the strong jobs numbers, inflation is also pushing closer to the Fed’s 2% target. Consequently, options traders are betting on a 92% chance of a rate hike at the upcoming Federal Open Market Committee’s meeting, compared to an 85% chance prior to the jobs report. Some are even speculating that the Fed could hike rates more than previously expected.
“Investors are looking at the jobs report and they maybe thinking that the Fed could be poised to move four times this year,” Robert Pavlik, chief market strategist at Boston Private Wealth, told Reuters.
Goldman Sachs economists project the Fed to raise rates in March and now believe the next hike will be in June instead of September.
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