Fed ‘may get pulled into another hike,’ says JPMorgan

JPMorgan’s Chief U.S. Economist Michael Feroli says today’s nonfarm employment growth “smashed expectations,” increasing by 336,000, the most since January. Senior Federal Reserve members have recently sounded content with policy on hold, a leaning that has been reinforced by the ongoing tightening in financial conditions, the analyst tells investors in a research note. JPMorgan is sticking with its call for rates to remain on hold, but says that if today’s jobs number is followed by hot inflation data, the Fed “may get pulled into another hike.” If that happens, “the already-tenuous case for avoiding recession next year gets harder to make,” writes the firm.