The February jobs report had something for everyone: encouraging developments for American workers and the Federal Reserve's inflation-fighting efforts.

Why it matters: Economists and data-watchers hoped the latest payrolls report would clear up the big question of the moment: Will more hot data force the Fed to tighten more aggressively?

• The report doesn't settle the question one way or the other. Some details point to a job market still bursting at the seams, alongside others that suggest inflationary pressures are diminishing.

Details: January's fiery-hot jobs report showed that employers have an insatiable appetite for more staff. That's still the case — a welcome development for job-seekers.

• Last month, employers continued to add staff at a rapid rate, with 311,000 overall positions. And revisions did not dramatically alter the picture for January or December.

Meanwhile, a surge of workers (roughly 270,000) reentered the labor force last month, helping push up the unemployment rate slightly to 3.6%.

• Notably, the labor force participation rate for prime-age workers (those between 25 and 54) is back at its pre-pandemic level of 83.1%.
• That more workers are returning to the job market is good news, because it could help bring the labor market back into balance in a less painful manner. Employer demand for workers does not have to come down as much if more workers are available to meet said demand.

Between the lines: Wages are especially crucial for the inflation outlook, and there the news looks favorable. Average hourly earnings were up only 0.2% last month.

• Over the last three months, they've risen at a 3.6% annual rate, down from 4.9% in the final months of last year. Slower wage growth should diminish price pressures.

What they're saying: "If you have a labor market that is showing less tightness on the labor force participation front, that will tend — all else equal — to put downward pressure on wage growth," Gregory Daco, chief economist at EY-Parthenon, tells Axios.

The bottom line: More job reports like the one in February could mean a more gradual labor market cooling that would be less painful for American workers.

• Attention now turns to next week's consumer price index report, which may hold more clues about inflationary pressures and could be the deciding factor on whether the Fed hikes by a quarter-point or half-point in 12 days.

Silicon Valley Bank's troubles — and fears that other regional banks could face similar issues — are rippling across Wall Street. That could complicate the Fed's inflation fight, as well as the economic outlook.

• Fears have been spreading that the rapid rise in interest rates over the last year has caused losses on banks' bond portfolios, which could create distress across the banking system.

Why it matters: Losses in the banking sector could throttle credit in the broader economy, if banks become more cautious in their lending and/or face deposit outflows.

State of play: Bond markets are going haywire. As of 11:50 ET this morning, the two-year Treasury yielded 4.71%, well below the 5.07% reached on Wednesday.

What they're saying: "There are recent developments that concern a few banks that I'm monitoring very carefully. And when banks experience financial losses, it is and should be a matter of concern," Treasury Secretary Janet Yellen said this morning while testifying before the House Committee on Ways and Means.

The intrigue: There's an irony to the bond market rally over the last two days. Silicon Valley Bank got in trouble because the market value of its long-dated bonds fell due to Fed rate hikes.

• But now SVB's troubles have triggered a bond market rally; the popular Vanguard Exchange Traded Fund with the ticker BND is up 1.3% today alone.
• Call it interest rate ouroboros — the snake eating its own tail.

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