Jobs Report Powers Wall Street Past Rate-Cut Dreams

If anyone is worried about a bubble on Wall Street, it was hard to tell on Friday as a blowout US jobs report convinced investors of America’s continuing resilience, overwhelming any attendant worries about delayed rate cuts. US payrolls swelled by 303,000 in March, topping all estimates. The unemployment rate edged lower to 3.8%, wages grew at a solid clip and workforce participation rose, underscoring the strength of a labor market that’s driving the economy. All major groups in the S&P 500 gained. “It’s hard to find anything wrong with the March Jobs report,” said Steve Wyett at BOK Financial. “The only people who might be disappointed in today’s report are those looking for relief from Fed rate cuts. We still expect the next move from the Fed to be to lower rates, but there is little sense of urgency at the moment.”

Not so in Europe. The European Central Bank will embark in June on a steady-yet-gradual path of interest-rate cuts that’ll run at least through the end of next year, according to economists surveyed by Bloomberg. Respondents anticipate a first quarter-point reduction in the deposit rate—currently at a record 4%—at the policy meeting following the Governing Council’s upcoming session on April 11. Similar moves will ensue once a quarter, taking the rate to 2.25% by late 2025.