U.S. Labor Market Strength Pushes Rate Expectations Higher as Fed Faces Debt Pressure

U.S. interest rates are rising after the labor market came in significantly stronger than expected.
Expected: +65,000 jobs
Actual: +165,000 jobs
Meanwhile, unemployment fell to 4.1%, below the 4.2% forecast.
Markets are now pricing in a more hawkish Federal Reserve.
However, with U.S. debt exceeding 120% of GDP, the Fed may have limited room to raise rates.
The Fed is trapped between inflation pressures and mounting debt.