Jobs Report Will Not Help Fed: Berro

Summary

Kelsey Berro, fixed income portfolio manager at JPMorgan Asset Management, discusses key elements to watch in the upcoming US jobs report, emphasizing that the report will not alter the Fed's inflation-concerned stance due to energy-driven inflation. She also comments on the transition to new Fed Chair Kevin Warsh and the evolution of Fed communication, noting that the market already operates in a data-dependent framework.

• Berro highlights job growth breadth, wages, and the U6 underemployment rate as important metrics in the jobs report.
• She argues the jobs report will not help the Fed because inflation, driven by energy, remains the primary concern.
• The correlation between interest rates and oil prices stays high, while equities have decoupled from oil.
• She discusses the shift away from forward guidance and the potential continuity of the dot plot under Chair Warsh.
• Berro concludes that the market already operates in a data-dependent framework, limiting the impact of communication changes.