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New York CNN  — 

Wall Street investors are gearing up for their version of Hell Week — a torrent of jobs data coming over the next few days could easily lead to volatile market swings.

The unflinching resilience of the US labor market is one of — if not the — greatest source of tension in today’s economy. Federal Reserve officials have said on numerous occasions that they believe elevated inflation rates will remain sticky until employment numbers, and the pace of wage increases, shift lower. That means the Fed’s already painful rate hikes are likely to continue until the job market simmers.

But it’s still boiling.

In just one year, the Federal Reserve has raised interest rates from nearly zero to a range of 4.5% to 4.75% to cool the economy. Job numbers, meanwhile, have blown past expectations for the past 10 months. The labor market is stronger than ever: The US added a shocking 517,000 jobs in January and knocked unemployment down to its lowest level since 1969.

Even as mass layoffs at companies like Facebook, Google, Goldman Sachs, Intel and Microsoft dominate headlines, job openings still outnumber job seekers by nearly 2 to 1.

The Fed’s response has been to keep on keeping on.

“In order to put this episode of high inflation behind us, further policy tightening, maintained for a longer time, will likely be necessary,” said San Francisco Fed President Mary Daly at Princeton University on Saturday. “Absent a substantial pickup in the share of working-age adults looking to be employed or a large change in immigration flows, labor force participation will continue to decline and worker shortages will persist, pushing up wages and ultimately prices, at least in the near and medium term,” she added.

Fed Governor Christopher Waller echoed Daly’s remarks last week.

“Recent data suggest that consumer spending isn’t slowing that much, that the labor market continues to run unsustainably hot, and that inflation is not coming down as fast as I thought,” he said.

“If those data reports continue to come in too hot, the policy target range will have to be raised this year even more to ensure that we do not lose the momentum that was in place before the data for January were released.” Waller said, explaining why this onslaught of jobs data is so important to investors. If the labor market remains strong, more Fed-induced pain lies ahead.

What to expect: ADP’s private payroll report for February and the JOLTS job openings, hires and quits report for January are expected Wednesday. On Thursday, Challenger, Gray & Christmas are set to release their job cuts numbers for February, and Friday brings the main show — the Labor Department’s monthly employment report.

Analysts forecast that the economy added 200,000 jobs in February, a smaller number than in January but still historically high. The unemployment rate is expected to remain the same, at 3.4%, according to a consensus poll from Refinitiv.

The predicted lack of movement in the unemployment rate has had some economists raising their projections for economic growth higher.

“We’re stuck in the messy middle.” said Josh Hirt, senior US economist at Vanguard. “Activity has weakened in the most interest rate-sensitive sectors of the economy, but core areas are still showing resilience. We are in this in-between period where the impact of rates has not fully worked through the economy.”

Hirt said he expects the unemployment rate will likely climb from its current 54-year low, albeit slowly and modestly, to around 4.5% to 5% by the end of this year.

It’s a big week in Washington, too

Wall Street and the Beltway are set to collide this week as key events in both monetary and fiscal policy consume the Capitol.

What’s happening: Federal Reserve Chairman Jerome Powell will testify in front of the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday.

Powell will deliver his “Semiannual Monetary Policy Report to the Congress,” and then open himself to hours of questions from lawmakers. Expect some spicier back and forth than what we see at the press conferences that follow policy decisions: Some lawmakers aren’t fond of the Fed’s current rate hiking regimen.

A preview of the report shows that the Fed chair plans to reiterate that more needs to be done to bring down annual inflation to the Fed’s target of 2%.

On Thursday, President Joe Biden is expected to present his annual budget to Congress. The plan comes at a time of deep fiscal unrest among lawmakers as arguments over the debt ceiling — the maximum amount the federal government is able to borrow — rage on. Republicans, who control the House, say they will not raise the limit until deep cuts are made in federal spending. The White House has refused to negotiate.

The president’s budget is typically used as a guideline for Congress to help shape spending priorities for the year ahead. Wall Street investors will likely pour over the document in order to understand what market-shifting debates may be coming down the pipeline.

Biden has said his budget will help offset increasing costs for Medicare, Social Security and health care by increasing taxes on the ultra-wealthy. The president also proposed a “billionaire” tax last year. Other Biden proposals, like increased tax on capital gains and on corporate stock buybacks, have roiled Wall Street.

Up next

Monday: US factory orders for January; earnings from Grindr.

Tuesday: Federal Reserve Chair Jerome Powell is expected to testify on economic outlook and monetary policy before the Joint Economic Committee; earnings from Dick’s Sporting Goods, Caseys General Stores, Squarespace, and Dole.

Wednesday: European Central Bank President Christine Lagarde is to speak, February ADP Nonfarm Employment Change, Federal Reserve Chair Jerome Powell is expected to testify on economic outlook and monetary policy before the Joint Economic Committee, February JOLTs Job Openings; earnings from Brown Forman, Campbell Soup and MongoDB.

Thursday: February Challenger Job Cuts, US Initial Jobless Claims; earnings from Ulta Beauty, DocuSign, BJ’s Wholesale Club and The Gap.

Friday: February Nonfarm Payrolls; earnings from Douglas Elliman.