Give me two minutes — here’s how the U.S. unemployment data could impact the market.
U.S. Unemployment Rate: 4.6%
Expectation: 4.5%
It’s a small miss, but the message is big.
The labor market is clearly weakening. In the short term, this is negative for economic growth and risk assets, even though it strengthens the case for future rate cuts.
And this is where things get tricky.
All eyes now turn to Thursday’s CPI data 👀
If inflation comes in lower than expected, markets may welcome it. Rate-cut expectations would solidify, and risk assets could catch a relief bounce.
But if inflation reaccelerates, the Fed will be cornered.
They can’t fight rising inflation while also protecting a weakening labor market. That’s a policy dilemma.
Higher CPI + rising unemployment is the worst possible combination.
It forces tighter policy just as the economy is already slowing.
If CPI surprises to the upside on Thursday, brace for a sharp downside move 📉
Volatility is coming. Stay alert, manage risk, and don’t get complacent.
