- Stocks and bonds experienced significant volatility after a strong jobs report fueled expectations that the Federal Reserve will continue to tighten, despite officials downshifting the pace of hikes this month.
- A selloff that pushed 10-year Treasury yields above 4.6% at one point fizzled out. Equities experienced a similar move, with the S&P 500 nearly erasing a 1% drop. The dollar wavered.
- Rather than increasing their bets on the Fed's December meeting, traders increased their bets on where interest rates will peak. Swaps reached a high of 4.98% before falling back, but the contract was still up eight basis points from where it was before the jobs report. The current range is between 3.75% and 4%.
- Employers in the United States added more jobs than expected, and wages increased by the most in nearly a year. In November, Nonfarm payrolls increased by 263,000, while the unemployment rate remained at 3.7%. The average hourly wage increased twice as much as predicted.
- Charles Evans, president of the Federal Reserve Bank of Chicago, stated that rates will need to be raised to a higher peak even as the central bank slows the pace of increases. He predicted that policymakers would reduce interest rates to 50 basis points after raising them by 75 basis points in four consecutive meetings.
- Evans' comments are the latest from a central bank official, including Powell earlier this week, to suggest a half-point increase when they meet on December 13-14.
