Powell said rates are still not high enough. “We'll need to stay there (at a yet-to-be-determined peak) until we're really confident that inflation is coming down in a sustained way. And we think that will be some time.” That wasn’t pivot language. It wasn’t pivot lite. It wasn’t even a pivot with a small ‘p.’

It doesn’t happen often (recessions don’t happen often), but it suggests that investors believe short-term rates are headed lower. Maybe not today, but weaker economic conditions would be expected to force the Fed to cut rates. When that has happened in the past, short yields fall faster than longer yields, and the curve normalizes. While it has been a reliable predictor, it has not done a good job of pinpointing the start of a recession.

Can there be too much hiring? Can job growth be too fast? It seems like an odd question. But following a better-than-expected jobs report on Friday and the initial negative reaction (shares pared losses and finished mixed), the question is worth exploring.

Congress’ response to the pandemic was to flood the economy with cash, including generous jobless benefits, tax credits, and stimulus checks. The extra cash boosted spending, but not all has been spent.

The Fed may dial back the size of its rate increases—75 bp increases began in June—but the peak in the fed funds rate, what analysts are calling the terminal rate, could be higher than previously expected. And the Fed could maintain that level for a while.

It’s not that all workers have their pick of jobs, but many businesses have struggled to fill open positions. We see it in the never-ending stream of help wanted signs.

Recently, investors are viewing the soaring greenback with apprehension, as some fret over tensions in global markets and added headwinds for earnings of firms that conduct a significant share of business overseas.