The rise in U.S. unemployment confuses markets ahead of inflation data

U.S. unemployment has risen to 4.6% compared to expectations of 4.5%

🔻 A clear signal: The labor market is weakening

⚖️ The precise equation now:

- Slowing employment ➜ Pressure on growth

- But on the other hand ➜ Increases the likelihood of interest rate cuts

• All eyes are on Thursday

When inflation data (CPI) is released that could change the game

📊 Possible scenarios:

- Inflation lower than expected ➜ A strong boost for the markets

- Inflation higher than expected ➜ A new headache for the Fed

The Fed is in a double bind:

It cannot curb inflation and protect a faltering labor market at the same time

🚨 If CPI comes in higher than expected…

Prepare for a downward move that could be severe in the markets.