The Wall Street Journal reports on recent developments in the job market, highlighting a rebound in hiring this spring, which raises concerns among Federal Reserve officials about inflation and appropriate interest rates. Some officials propose potential rate increases later this year, reversing previous cuts made to stabilize a labor market that has since improved. This latest report complicates discussions on the timing of possible rate hikes, suggesting that the idea of further rate cuts is no longer viable.

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Nick Timiraos | Hiring Rebound Gives Ammo to Fed Hawks

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Nick Timiraos

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Reacceleration in hiring this spring will provide more grist to Federal Reserve officials who are concerned about inflation and fear interest rates are too low to restrain new price pressures.

Some of those officials have suggested in recent days the Fed should be prepared to raise rates later this year, taking back at least some of the three quarter-point rate cuts officials made in the second half of last year. Those reductions were aimed at stabilizing a labor market that looks much healthier today than it did then.

The report won't neatly resolve a debate over how far the Fed should lean toward entertaining rate increases later this year, but it does underscore how the case for cutting rates anytime soon has been buried.

Read Original at WSJ →