• According to the Bureau of Labor Statistics, the US economy added 517,000 jobs in January while
the unemployment rate was little changed at 3.4%. The number of unemployed persons was also little
changed at 5.7 million.
• On the surface, the January report registered way above most industry expectations, with some observers
concerned that the Federal Reserve may need to continue rate increases for longer than markets are
anticipating. However, January’s total is likely to be significantly revised downward following adjustments,
as is historically common during January.
• Notably, January’s significant payroll increase followed the announcement of massive layoffs by several
tech giants, including Google and Microsoft — while corporate America also frets about the risk of a
looming US debt ceiling limit.
• On February 1st, the Federal Reserve’s policy-setting committee raised their target Federal Funds Rate
(FFR) range by 25 basis points to 4.50%-4.75%, slowing their speed of rate increases after four consecutive
75 basis point hikes and one 50 basis point hike in December.
• The FOMC’s policy decision arrives after weeks of falling leading inflation indicators. However, several
macroeconomic indicators remain far from recession territory, convincing many officials to stay committed
to additional increases and holding rates higher for longer if needed.
• Based on data from the Chicago Mercantile Exchange’s Fed Watch tool, most market watchers anticipate
another 25 basis point hike at the FOMC’s next meeting in March.

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