"‘New Federal Reserve News Agency’: April non-farm payroll data is solid, Fed’s policy focus should shift to inflation."

Nick Timiraos, a renowned financial journalist known as the "New Federal Reserve Communications," wrote:

Four months ago, one of the major challenges facing the Federal Reserve was whether it needed to continue cutting rates to support what then appeared to be a weak labor market. Now, that issue no longer exists. The labor market has stabilized, and due to tariffs and the war in Iran, inflation is now slowly rising instead of falling.

The April jobs report highlighted the shift in the economic outlook. When determining the Fed’s next move (the Fed has now clearly paused rate hikes), the focus should be placed entirely on inflation data.

Hiring remains stable, the unemployment rate has not risen, and income growth in April was solid—all of which do not justify a loosening policy. Given that the labor market gives the Fed reason to wait, the next stage of policy debate will focus on when and how to shift to a neutral stance, where the chances of rate hikes and cuts are about equal. The answer may depend almost entirely on inflation data.

According to a previous article by WallstreetCN,

the US added 115,000 nonfarm jobs in April, far exceeding expectations and setting the largest two-month gain in two years, with the unemployment rate remaining at 4.3%.

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