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#NFPBlowout172K 172K Jobs: The Rate-Cut Narrative Just Got Wrecked The May NFP print landed at 172K against an 85K consensus, with April revised up to 179K. That's two consecutive months of jobs data blowing through expectations, and it breaks the "economy is softening" thesis that most rate-cut models were built on. The market reaction was immediate. Spot gold fell roughly 3.5%, broke below $4,320/oz, and erased all its year-to-date gains in a single session. Treasury yields surged, the dollar hit a two-month high, and markets are now pricing at least one rate hike by year-end. A full narrative reversal in one afternoon. The detail worth sitting with: average hourly earnings actually softened to 3.4% from 3.6%. Jobs are beating hard, but wage growth is decelerating. That matters because wage-driven inflation is the main channel from employment to prices. If earnings keep cooling, Fed Chair Warsh's case for hiking gets murkier even with payrolls this strong. Trump said he still wants cuts but he's leaving the October FOMC to Warsh. That political deference is notable. Warsh chairs his first meeting June 16-17 with the Fed in blackout now until then. The next few months will write this story. If hiring holds and wages re-accelerate, hikes arrive. If either cools, Warsh has an off-ramp back toward easing. Worth reading: NFP 172K vs 85K expected Share your thoughts in the comments 👇