The U.S. labor market demonstrated resilience at the end of 2024, with December payrolls significantly exceeding expectations at 256,000 jobs, compared to economists’ predictions of 160,000. This robust employment growth, coupled with a declining unemployment rate of 4.1%, has significant implications for monetary policy. Markets reacted swiftly, with the S&P 500 futures declining and Treasury yields jumping, as investors recalibrated their expectations for Federal Reserve rate cuts. Market strategists now anticipate sustained higher interest rates through 2025, citing both economic strength and ongoing fiscal concerns as key factors maintaining upward pressure on yields.
