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Jobs have been the talk of Wall Street for most of the past month. Heading into the February unemployment report due this Friday, stock market crash alarms are ringing all across financial markets. What do you need to know heading into this week’s major market catalyst?

Well, all eyes are once again on the Federal Reserve. Indeed, because of the central bank’s aggressive rate hikes over the past year, many economists are waiting for economic indicators like unemployment and consumer spending to reflect the impact of the Fed’s monetary tightening. On that front, things have been almost too good to be true.

Last month’s jobs report was, for some, a wakeup call that the Fed’s hawkish agenda is far from over. The U.S. economy added a jaw-dropping 517,000 jobs in January, reflecting an unemployment rate of just 3.4%, the lowest level in more than 50 years. While on the surface level this is promising — low unemployment is a primary objective of just about every modern economy — it’s also almost unexplainably bizarre.

Interest rates often go hand in hand with unemployment. When lending rates are high, many businesses — especially highly leveraged, growth-centric companies — are typically forced to make workforce cuts, which should lower the aggregate demand in the country enough to lower prices. This is the logic the Fed has championed through its entire battle with inflation. With that in mind, it’s undeniably strange to see record low unemployment amid seemingly constant interest rate hikes.

Now, unemployment is considered a lagging indicator, but the Fed has been raising rates for more than a year. As much as government leadership has patted themselves on the back for last month’s stellar unemployment numbers, a reversal likely needs to occur to see inflation ease to acceptable levels. That’s a point Fed Chair Jerome Powell echoed in today’s hearing with the Senate Banking, Housing and Urban Affairs Committee:

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated […] If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”

Stock Market Crash Worries Rise Alongside Projections of Higher Unemployment

Powell’s hawkish comments today, alongside mixed expectations for Friday’s February jobs data, has put the markets in something of a pouty mood. Indeed the S&P 500, Nasdaq Composite and Dow 30 were each down between 1.2% and 1.8% heading into market close — perhaps justifiably so.

Current projections have the U.S. adding 200,000 jobs last month, representing 3.5% unemployment, a mild deterioration from January’s 3.4% figure. Make no mistake, worse is better at this point in time, but hiring is likely still too strong to sate the recession-hungry Fed. Given Powell’s comments earlier today, more rate hikes are basically a virtual certainty, despite lofty hopes for a “Fed pivot.”

Not everyone’s in agreement over February jobs predictions, however. Economists at Deutsche Bank believe the U.S. added 300,000 nonfarm payrolls last month, citing February’s surprisingly warm climate. Deutsche isn’t alone on that front, either. Jefferies analysts expect 290,000 added jobs, while The Wall Street Journal estimates February payrolls to have climbed by 225,000.

“February’s jobs data probably has more of an ability to move markets than January’s report because there’s very heightened sensitivity to any suggestion of the economy overheating,” said Will Compernolle, a Macro Strategist at FHN Financial.

Expect the markets to keep a close eye on the report for signs of an even more hawkish Fed rate hike trajectory.