What does the March jobs report mean for the Fed?
It keeps one of the harder problems off the table. Powell said this week the war created the possibility of a greater inflation/labor market tradeoff but said the Fed didn't face that problem right now. The March payroll report rams that point home.
A falling unemployment rate alongside an unwind of the big drop in February suggests the labor market may be in better shape than it appeared, at least before the war hit—or, at a minimum, that it wasn't getting worse.
The latest figures relieve the Fed of having to decide if they face a tradeoff. They might, but for now, they don't. That could embolden the contingent that has for the last two meetings been pushing to back away from a cutting bias and that has argued rates are much closer to neutral. wsj.com/economy/jobs/march-job...…
