What's next for the Fed

Just two days ago, Fed Chair Jerome Powell acknowledged that a "disinflationary process" was underway, which markets seized on as reason to believe rates won't get hiked by as much as some previously thought.

• The jobs numbers reversed that perception, as traders and analysts assigned higher odds to continued rate hikes.

By the numbers: The yield on two-year Treasury securities was up a whopping 0.17 percentage points this morning, reflecting expectations that the central bank will push rates higher for longer than seemed likely before the jobs numbers.

• The odds the Fed will raise rates at its May policy meeting rose from 30% yesterday to 55%, according to calculations based on futures prices from the CME Group.

What to watch: On Tuesday, Powell will appear at the Economic Club of Washington, where he can tweak his messaging, and convey whether the jobs numbers shifted the policy outlook as much as markets imply.

• He is not scheduled to deliver prepared remarks at the event, but rather will be interviewed on stage. Powell is no stranger to using the Q&A format to signal a shifting policy stance, as Neil has seen firsthand.

The bottom line: The Fed often emphasizes the importance of not placing too much weight on any single data release. But this was a hard one to not take notice of.