The U.S. economy added 130,000 jobs in January, nearly double the 70,000 economists expected and the strongest monthly gain in months. The surprise came after the White House warned markets to brace for weakness.

Expectations were rock bottom heading into the report. The labor market added just 584,000 jobs in all of 2025, the worst year since 2020. December managed only 50,000 jobs.

White House economic advisor Kevin Hassett had pre-emptively told CNBC not to “panic” and to expect “slightly smaller job numbers.” Instead, the 130,000 print suggests the labor market has more life than feared.

Prediction market participants rapidly repriced Federal Reserve expectations following the blockbuster jobs report, with Polymarket traders slashing the probability of near-term rate cuts.

Market Odds Surge On Fed Pause

The odds of no rate change in March jumped from 80% to 92% on Polymarket’s Fed decision market immediately after the jobs data dropped.

April probabilities for holding rates steady also surged, rising from 69% to 79% on the April contract.

June saw the odds of no cute increase from 31% to 37%.

White House Stays Dovish Despite Data

The swift market repricing came as White House economic advisor Kevin Hassett maintained his dovish tone on monetary policy.

“I think there’s plenty of room for Fed to cut rates,” Hassett said during media appearances.

Hassett projected robust economic performance ahead, telling reporters the AI boom can drive productivity and economic growth.

He said he can easily see 4% to 5% GDP growth this year, while emphasizing inflation numbers will be a key factor for Fed decisions.

The disconnect between Hassett’s optimistic view on rate cuts and traders’ rapid repricing may signal ongoing uncertainty about the Federal Reserve’s policy path.

While the White House appears confident in the case for monetary easing, prediction market participants are betting the central bank will likely maintain its patient approach given the resilient labor market.

The sharp moves suggest investors are recalibrating expectations for when the Fed might resume its rate-cutting cycle, with March action now appearing increasingly remote.

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