Tomorrow's U.S. Department of Labor jobs report might "put a stamp of confirmation" on indications that the economy is very resilient—and convince the Fed to initiate another 75 bps increase in interest rates.

Although markets expect rate cuts in 2023, the renewed momentum in the labor market might convince the central bank to keep rates higher for longer.

Facing the hottest cost pressures in 40 years, policymakers have lifted the target for the federal funds rate by 1.5% over the past two months—the steepest increase since the price-fighting era of Paul Volcker in the early 1980s.