Strong May jobs report (hiring surge, steady 4.3% unemployment) boosts Fed rate hike bets. Wages grew but annual rate fell to 3.4% (4-year low), suggesting incomes lag inflation. Labor force grew only 83k. Political narrative of 'native-born Americans rushing in' lacks data support. Market prices ~50% chance of a hike by year-end, but one-month data may not be a trend.

Market prices ~50% chance of a 50bp hike vs. 50% chance of no change (weighted avg = 25bp). Jobs are in low-wage sectors (not tech/finance). If war is prolonged and gas stays above $4, inflation expectations could force a Fed hike. Inflation swap market expects next CPI (4.3%) to be the high, then below 4% as oil futures curve is backward-sloping.

Equity market is healthy with robust demand for offerings. Hedge funds are long AI/tech stocks but heavily hedged (most hedged ever), showing skepticism. Retail continues to buy unless job losses appear. Today's 2% selloff is a buying opportunity; S&P 500 has a clear path to 8000+ this year. Fundamentals justify valuations; earnings are solid.