As we noted in our preview, today's payrolls print was indeed "bad news is good news" as the surprise five-sigma miss (-23k) on payrolls (albeit with a drop in the unemployment rate) sent rate-hike odds reeling lower...

“History doesn’t repeat, but sometimes it rhymes. For the third time in as many years, July jobs data saw a mid-summer loss of momentum. While incoming inflation data will be the ultimate arbiter, slowing jobs growth helps support a September hold,” says Lindsay Rosner, head of multi sector fixed income investing at Goldman Sachs Asset Management.

That helped smash Treasury yields lower, led by the short-end...

...which in turn crushed the dollar...

...lifting gold above $4350...

Some good news for Bessent, JPY is strengthening...

Stocks are also soaring, with Nasdaq leading the way...

Admittedly, as JPMorgan's Feroli flagged, technical effects such unwinding of World Cup-related hiring could have driven the softer payroll print...

Jeffrey Rosenberg, a portfolio manager at BlackRock, says on Bloomberg TV, “I’d be hesitant to just write this report off.”

He says that the decline in the unemployment rate essentially reflects a drop in the supply side of the labor market. 

... but for now, the panic among the Fed whisperers that Warsh has unleashed more uncertainty (and is driving up the term premium) is now a back story as attention shifts from inflation back to growth.