Stocks and bonds declined in response to much better-than-expected job growth. This week's consumer inflation (CPI) report could further pressure yields.

A red-hot jobs report means that interest rate cuts aren't coming, and cuts could be next. Here's what strategists say is next for rates and stocks.

"Inflation is stuck above target and risks are skewed to the upside. Economic activity is robust. We see little reason for additional easing."

Before the strong December jobs report was released, the odds were already low for an interest rate cut in the next Federal Reserve decision on January 29.

"Markets tried to front-run the Fed on the level of interest rates and are now paying the price," Jamie Cox of Harris Financial Group said.

"I think really the market is saying maybe no rate cuts in 2025, and that the 10-year could very easily break well above 5%," Jeremy Siegel said.

US stocks fell Friday after the December jobs report showed another month of strong employment, complicating the Federal Reserve’s rate-cutting campaign.

Key Takeaways The odds of the Federal Reserve cutting its benchmark interest rate this year fell after a jobs report Friday showed hiring in December blew past expectations.Strong job growth means less pressure on the Fed to cut interest rates to save the economy and prevent layoffs.

The December jobs report showed a surprise surge in hiring and an unexpected drop in the unemployment rate. Taken together, the data strengthen the case for the Federal Reserve to maintain its current cautious stance toward lowering borrowing costs,