Jonathan Levin

Not every interest-rate apex is the same, and this one looks particularly precarious for equities.

The US Federal Reserve's 'hawkish pause' is precarious for equities, as the central bank retained its hawkish bias but removed key wording from its post-meeting statement. The Fed is most likely to stand pat, but any deviation from that plan would almost certainly entail more firming, not easing. Unlike previous pauses, there are substantial downside risks in the coming year, which means there is plenty of reason to temper enthusiasm about the pause in Fed policy.

Notwithstanding a small uptick in April, the US jobs market is clearly cooling. The central bank needn’t hurry it along with more interest rate increases.

For all the threats facing the economy, it’s hard not to project some cautious optimism about the US consumer when Royal Caribbean and Norwegian are reporting smooth-sailing quarters.

Rapidly rising prices have become a “known known” that the central bank and investors can incorporate into their decisions. It’s the surprise that can throw them off balance.

With the index now just a whisker away from a 52-week high after a 23% gain this year, it’s clear that the pessimists were premature. And they might still be.

The bears have greatly underestimated the strength of the US labor market. That’s the takeaway from Thursday’s sharp reversal in what turned out to be a fraudulent jump in initial jobless claims earlier in the month.

Several Federal Reserve officials have mused about putting off an interest-rate increase at the June policy meeting. History shows that’s a smart move in a hazy economy.

The sturdy JOLTS report triggered renewed consternation among Fed-wary traders. But this isn’t last year’s economy.

The latest US payrolls report showed that momentum is picking back up and that job gains are widespread, a scenario inconsistent with calls for a second-half downturn.