The Federal Reserve's latest jobs report might not have a major impact on its easy money policies.Michael Schumacher from Wells Fargo Securities says it is premature to believe that July's strong numbers will cause the Fed to taper its monthly bond purchases."This report was quite strong. The report was not a blockbuster, the head of macro strategy at the firm told CNBC's Trading Nation on Friday. It's possible that the Fed will begin to talk about tapering if there is another strong one. Let's suppose October.Schumacher's scenario suggests that the Fed might begin to implement tapering in November. This would put upward pressure on 10-year Treasury Note yields.Schumacher's prediction is not complete without a wildcard: Covid-19 Delta variant cases. This surge could cause negative pressure on yields.He said, "It's open to question how severe delta turns out and how aggressively governments respond to it."Schumacher isn't confident that the government will order a massive lockdown, but he warns that new restrictions on movement could hurt economic activity.His overall concern for the bond market is more sticker inflation than anticipated inflation. Schumacher is worried that it will cause a significant rise in yields."The problem is that no one has ever really dealt with a Pandemic. He said that we haven't seen one in over 100 years. "So to believe that inflation will rise and fall quite dramatically, and then return to normal in four or six months or so seems foolish to us.The 10-year yield was at 1.30% on Friday. The 10-year yield rose 5% last week, and has risen 42% so far in the year. Schumacher predicts it will rise to 1.60% or 1.90% by the end of the year, which is below his June forecast on "Trading Nation".Schumacher stated that "as far as bond market goes I'd say that you want to remain out of trouble." Staying at a very short maturity is the best way to avoid any difficulties. It could be three years or less. While no one will make a lot of money doing this, they'll still be fairly safe.Disclaimer
