The latest employment figures came in stronger than anticipated, effectively erasing near-term rate cut prospects for the Fed this month. Market participants have now repriced their expectations accordingly—the probability of easing in the immediate term has collapsed to virtually zero. Treasury yields climbed in response as traders dialed back their bets on monetary easing. Yet the outlook remains less grim further out: markets are still pricing in approximately two rate cuts throughout 2026, with the initial cut anticipated in the first half of the year. This divergence between short-term hawkishness and medium-term dovishness reflects the current uncertainty surrounding inflation trajectory and labor market resilience.