The jobs number was great, but it’s all about the Fed now

This morning, I gave you an initial reaction to the jobs number, saying:
A bad number won’t change the Fed’s forward guidance because the Fed has a tightening bias. But that bias means that a good number could tip us toward four rate hikes in 2019 from three.
Let me give you a more in-depth view now.
Market reaction
Before the number came out, I didn't expect a big market reaction. But I think we are seeing the market move to my view more strongly than I anticipated because the 10-year is up to 3.214% on the back of the bullish jobs report. The big difference is that we are seeing a bear steepening, with the 10-year trading 30 basis points wide of the 2-year. I see that as a mildly positive signal regarding economic expectations even though I am personally expecting the US economy to s...

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