Non-farm payrolls came in significantly lower than expected, causing volatile swings in financial markets.

Futures markets initially priced in a more dovish Fed after NFP, but that didn't last long due to two factors: immediate inflationary effects of higher oil prices and longer-term AI impact on labor market.

Several Fed members (Powell, Cook, Waller) expressed concerns that AI is hampering normal job creation.

This could be a big problem for the Fed.

Normally poor job growth indicates slowing economy, but this time may be different with economy expanding and becoming more productive without job growth.

What if this time is different?

Without certainty about labor market weakness causes, Fed may have to lower rates, but different rates may react differently if market feels easing addresses non-existent problem.

Short-term rates (savings accounts, car loans) could go down, but longer-term loans like mortgages could move higher if market thinks Fed is making a misstep and inflation may follow.