Our takeaway from today’s labor market report – that is assuming the numbers print in line with consensus – is that the Fed’s monetary largesse is no longer justified. We knew that some time ago. And the Fed has finally come to it senses too, realizing that USD120 billion in bond purchases are no longer necessary when we consider that real GDP has returned to its pre-pandemic peak; labor demand is off the charts; and inflationary worries run amok. With the economy expected to grow at a pace that is (almost) uncomfortably above potential, the path is clear for less easy policy. More on the Fed further down below. We start first with a short and thorough preview of today’s data.


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