US employers created just 199,000 jobs in December. Worse, the unemployment rate plunged from 4.2% to 3.9%, suggesting full employment is quickly approaching. Not surprisingly, M-o-M wage growth was up a strong 0.6%, Y-o-Y it’s up 4.7%. With full employment knocking, despite employment being 3.4 million below its pre-Covid-19 high, the Fed must raise rates to prevent demand-based inflation or a wage-price spiral. Three 2022 quarter-point hikes are increasingly possible.