It's not as if U.S. central bankers needed more reasons to step up the pace of interest rate hikes.
But that's what they got on Friday, when the Bureau of Labor Statistics' latest jobs report showed employers added 431,000 to payrolls last month and the unemployment rate fell to a two-year low of 3.6%.
Rate futures contracts reflect odds-on bets for the policy rate to end the year in the range of 2.5% to 2.75%, with about a one-in-three chance of going even higher. Either way that is high enough to put the brakes on growth. Chicago Fed President Charles Evans, who personally prefers the more measured path, told reporters Friday that he doesn't see a big risk in using "some" half-point rate hikes to bring borrowing costs to neutral sooner, as long as the goal was not to raise rates much faster and push them much higher.
Policymakers don't want to risk that expectations for ever-higher prices get baked into American household and business psychology. Rate hikes are designed to curb demand and blunt that risk.
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