One positive sign may be that the last two days of gains have come despite sharp jumps in Treasury yields. The Federal Reserve minutes, and comments by Fed leaders on Thursday, point to another big rate hike later this month.
Earlier this year, rapid moves in the bond market and hawkish Fed comments appeared to spook stocks, but equities are grinding higher this week.
Michelle Girard, head of U.S. at NatWest Markets, said on CNBC's "Closing Bell" that the market is getting more comfortable with an aggressive central bank, as long as inflation starts to decline from here.
"The market has priced in an awful lot of Fed tightening. … Do we need to reprice even higher or is there a risk of the Fed having to do more? And right now, as there are signs of inflation cooling, as there are signs of cooling in terms of the U.S. economy, it doesn't feel like the market needs to worry about the Fed doing even more," Girard said.
The next big test of the U.S. economy comes in the form of Friday's jobs report.
"If the numbers suggest wage growth may have peaked, that employment is still strong but somewhat cooler, then the market can get comfortable with the idea that enough is priced in for the Fed right now," Girard added.
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