March Non-Farm Payrolls Exceed Expectations, Indicating Resilience in U.S. Job Market; Inflation Remains Core Variable for Fed's Monetary Policy

AirdropBlackHole · 2026-04-04T04:21:18+00:00

Huatai Securities highlights that strong U.S. job growth in March signals market resilience, but rising oil prices from Middle East conflicts are more crucial for inflation and the Federal Reserve's policy decisions, potentially impacting interest rates.

AirdropBlackHole

2026-04-04 04:21:18

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On April 4, Huatai Securities stated that the March non-farm payrolls exceeding expectations demonstrate resilience in the U.S. job market. However, amid the escalating conflict in the Middle East, the impact of high oil prices on inflation expectations is more critical for the Federal Reserve’s monetary policy. The recent continuation of conflict in the Middle East and the supply gap caused by the blockade of the Strait of Hormuz have driven up oil prices and inflation expectations. Currently, inflation is the core variable for the Fed’s monetary policy. The dual targets of employment and inflation provide some leeway, allowing the Fed to avoid raising interest rates to combat inflation. Even if the Fed does not raise rates, rising inflation expectations could lead to an upward shift in the Treasury yield curve, resulting in a substantive tightening.

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