Data showing the fastest job growth in six months, a surprising drop in US unemployment and higher wages sent Treasury yields surging and had investors furiously reversing course on bets for a larger-than-normal half-point interest-rate reduction as soon as next month.
The “no landing” scenario – a situation where the US economy keeps growing, inflation reignites and the Federal Reserve has little room to cut interest rates – had largely disappeared as a bond-market talking point in recent months.
It only took a blowout payrolls report to revive it.
