It's not that I think inflation will be dead forever, but there are very powerful global forces keeping it low. The bond-market vigilantes are clearly trying to string up the innocent.

It means we sort of dodged another bullet on the inflation front. These kinds of numbers put the Federal Reserve in a difficult box. We don't have inflation, the economy is growing too fast, they are afraid it won't keep up, but it's hard for them to raise rates without any inflation on the doorstep.

It's a surprise -- we thought the unemployment rate would be edging up.

It's a surprise. Certainly the Fed is worried about inflation, but it has been subdued in recent months, so I wouldn't be too concerned about that.

This is the way inflation gains a toe hold,

This is what the market did in 1974, ahead of a slowdown in 1975, and the Fed continued to hike rates in the face of marginal data turning worse, ... I don't see where the Fed sees 'traction'.

This market is wiling to brush away bad news because it doesn't believe in it. Compare it to the Three Little Pigs, when there's a warning they say 'we've heard this before.' But one of these days, there is going to be a warning that the market should have listened to.

This is very, very much in line with the idea we're slipping into a recession.

The report is still a poor one given what has come before, but not terrible,

They are desperately concerned about maintaining inflation fighting credibility. So the Fed is not focused on inflation, it's focused on inflation in the future.