「Powell Era」's First Non-Farm Payroll Report Significantly Beats Expectations, Trump Camp Remains Unyielding, Rate Hike Now Market Consensus

June 5. Today, the first nonfarm payroll report of the "Powell era" hit newswires, and it came in far hotter than analysts had expected. Analysts and traders are largely aligned on one thing: the Federal Reserve will raise interest rates. Leading analyst and well-known "Fed Whisperer" Nick Timiraos noted the jobs report won’t resolve the debate over how large the Fed’s next rate hike will be, but a near-term rate cut is now essentially off the table. CME Group’s FedWatch Tool backs that take: as of December, the probability of a Fed rate hike has jumped to 67.7%, with the only remaining disagreement being the size of the move. Major investment banks are also weighing in on their outlooks: BNP Paribas forecasts the Fed will kick off a streak of three consecutive rate hikes starting in December 2026. After the data release, the only group still insisting on rate cuts is the Trump administration. White House National Economic Council Director Kevin Hassett told reporters post-release that the U.S. jobs data shows no sign of looming inflation, so the Fed shouldn’t raise rates—and there’s still ample room for a cut. “The Fed’s always behind the curve,” he said. “There’s still plenty of room for a rate cut.”