Core Insights - The June employment data significantly exceeded expectations, with non-farm employment growth far surpassing predictions and an unexpected decline in the unemployment rate [1] - The market reacted swiftly, leading to a sharp drop in Treasury prices, a surge in overnight index swap (OIS) rates, and a collapse in secured overnight financing rate (SOFR) futures, resulting in a "bear flattening" of the yield curve [1] - The probability of a rate cut in July plummeted from 25% to 4% following the data release, indicating a strong labor market that supports the Federal Reserve's decision to maintain interest rates [1] Employment Data Analysis - State and local government jobs increased by 73,000, primarily in the education sector, while federal government jobs decreased by 7,000 [1] - Private sector employment growth was below expectations, yet the overall labor market remains robust, providing sufficient justification for the Federal Reserve to keep rates unchanged [1]