Despite slower wage growth, and a jump in participation, the top two things Powell wants to see from the labor market to eventually get the Fed to pause, and maybe stop dismantling the economy, the opening rally began to fade quickly.  Call it muscle memory, as these days every rally feels like a trap.

Then came the more proof for the Fed that their ham-fisted approach is beginning to work.

The ISM Service report for December was an unmitigated disaster.

Coming in at 49.6, the number missed the consensus of 55.0 by a mile and slipped into contraction for the first time since May 2020 (reading under 50 are contraction above expansion).

Taken with regional Fed service sector surveys, and the PMI report, it's clear the economy is moving lower and not at a faster pace.

When that news came out all eyes shifted quickly to bond yields and the CME Fed fund tool.

 The ten-year yield is down more than 4% and approaching a key support point at 3.40%.

And remember yesterday when the street modeled for terminal rate at 500-535?  Now it is back to 475-500, and now the first rate cut happens in November not December.

it's a better day, but I would not be surprised to hear Fed officials try to temper excitement. But today is huge.  The economy is slipping, and what I have been saying is happening, the decline will happen all of a sudden.