Early heads-up for Friday's Non-Farm Payrolls (NFP) report, There's a high chance it will become the new Fed Chair Kevin Warsh's excuse to go hawkish. A lot of people don’t know that Warsh is a hardcore 2% inflation fundamentalist in the truest sense. He’s not likely to easily give in to Trump’s calls for rate cuts and money printing. Currently, the NFP forecast is for 96k new jobs (previous: 115k), with the unemployment rate expected to hold steady at 4.3%. That’s the expectation, but in reality, new job growth might fall below 80k. At the same time, due to supply chain disruptions and labor shortages, hourly wage growth month-over-month could stick above 0.4%. Add to that April’s PCE surging to 3.9%, a three-year high. Combine these factors, and you get the classic stagflation model. This means Warsh is absolutely not going to bow to weak employment numbers at the June 17 FOMC meeting. Rate cuts? Pretty much off the table.