The U.S. labor market delivered a stronger rebound in August, potentially strengthening the case for Federal Reserve officials who favor keeping interest rates higher or considering another increase at the September meeting.

Employers added 162,000 jobs last month, according to the government’s Nonfarm Payrolls report released Friday. The gain was substantially above the 56,000 jobs economists had forecast and followed a revised increase of 21,000 in July. The July figure was initially reported as a 23,000-job decline.

The unemployment rate remained at 4.1%, in line with both the market estimate and the previous month’s reading.

The stronger employment figures quickly affected financial markets. Bitcoin dropped about 2% to below $80,000, while the 10-year U.S. Treasury yield climbed 3.3 basis points to 4.80%. The two-year yield rose seven basis points to 4.40%, and U.S. stock futures moved slightly lower.

Fed Hike Expectations Shift Again

The report arrives less than two weeks before the Fed’s September policy meeting, where officials will decide whether to adjust interest rates.

Fed Chairman Kevin Warsh increased expectations for a potential September hike last week after delivering a hawkish address at Jackson Hole.

Those expectations cooled earlier this week, however, after Fed Governor Chris Waller, supported by New York Fed President John Williams, suggested that a rate increase was far from certain. His comments helped push markets higher.

Friday’s employment figures now give policymakers on the hawkish side another argument for tighter monetary policy. A healthier labor market could make it easier for the Fed to justify maintaining restrictive rates if inflation remains a concern.

But the jobs report is unlikely to settle the issue on its own. The next major signal will come from the August consumer price index report due next Friday, which could prove critical to the Fed’s final decision on rates.