Positioning for a return to disinflation

Non farm payrolls just came out and in totality the numbers favor disinflation.

Even though the headline number was high, the unemployment rate also ticked up, thanks to a greater participation rate. This means labor supply is returning, also evidenced by the lower than expected hourly earnings numbers. The Fed can look at this number and say that there is no urgency to hike 50 bp and risk putting more banks under pressure.