January’s blowout jobs report, posted Friday morning, showed nonfarm payrolls rose by nearly three times as much as economists had been expecting.
No, the economy isn’t slowing.
No, the Fed’s big campaign of interest-rate hikes all last year hasn’t shown up yet on Main Street.
And no, there’s no reason to expect rate cuts any time soon.
Oh dear. A lot of investors just learned again, the hard way, the old rule: When someone tries to tell you something about themselves, listen.
On Wednesday afternoon Federal Reserve Chairman Jerome Powell said over and over again: We’re not done raising interest rates. We’re not finished. We’re not expecting to cut rates any time soon. Barring a complete surprise, we’re not expecting to start cutting rates this year. We would much rather raise rates too high and keep them high for too long than start cutting them a moment too soon.
When the Fed chairman says he’s going to keep rates higher for longer, who are you gonna believe: Wall Street or your own ears?