Economists have dubbed it bad-good news: An unexpectedly high number of jobs added in June is likely to roil markets — and hand Federal Reserve Chairman Jerome Powell the biggest challenge of his career.

Powell will have a harder time making the case for an interest rate cut when the central bank meets later this month, after the government announced that the economy added 224,000 jobs in June, compared with the 165,000 expected by economists.

“It becomes harder for the Fed to decide if it’s appropriate for the Fed to cut rates in July,” Daniel Zhao, senior economist at Glassdoor.com, said.

After Powell obliquely suggested in his most recent remarks that the Fed was open to an interest rate cut, perhaps as soon as July, markets might have relied too heavily on that assumption, Putri Pascualy, managing director for PAAMCO Prisma, said.

“Our sense is that bad news is actually good news because that’s what the market’s anticipating,” Pascualy said. “Softening job numbers open up the door for rate cuts … That’s been baked in the market,” she said, but today’s strong report throws a curveball to that expectation.

“It really complicates their narrative and it’s no longer a sure thing that they cut rates this month. They may want to wait and see a couple more job reports before they make a move,” Mark Zandi, chief economist at Moody’s Analytics, said.

The Fed chairman will face an unpalatable choice at the central bank’s meeting at the end of the month: Failing to deliver the rate cut that President Donald Trump has been clamoring for — and the market is already expecting — could have a seismic effect on Wall Street.

“There’s a very good probability that we’ve got to unwind some of this,” said Sameer Samana, senior global market strategist for the Wells Fargo Investment Institute. “Something’s got to give, to a certain extent.”

In the aftermath of the Great Recession, investors became conditioned to a cycle of dip-and-rescue, with the Federal Reserve responding to market drops with more accommodative policy. “It’s kind of the playbook that was fashioned out of the crisis. Every time stocks would go down, the Fed would step in,” Samana said. “What the markets might be missing is even though the Fed is willing to help out and step in, they might not do it as quickly as the market hopes.”

Right now, investors are treating the prospect of lower interest rates as a kind of cure-all, Pascualy said.

“The crux of all the positive tenor in the market is contingent on one thing, which is Fed rate cuts. That’s extremely risky,” she said. “The positive is one thing and it has been priced in, versus a multitude of negatives that have not been priced in.”

Zandi said if it becomes evident that the Fed doesn’t have enough room to maneuver because rates are historically low to begin with, or that rate cuts are unable to stem an exodus of jobs from the economy, investor sentiment could plummet. “If that’s the case, then the market would turn very sharply,” he said. “At this point in the business cycle, there’s not a lot of room to maneuver, so it makes it very difficult for the Fed to thread the needle.”

On the flip side, if the Fed trims interest rates in the absence of clear-cut signs of an impending slowdown, it risks overheating the economy — particularly, analysts said, if the China trade war does reach a successful resolution.

“The big worry is if China gets solved and the economy really picks up,” Ryan Detrick, senior market strategist for LPL Financial, said. “That can bring back a lot of confidence and business investment.”

Although corporate America has been agitating for an end to the tariffs, supply chain disruptions, and negative sentiment that have inhibited growth since the trade war began, a rapid reversal of fortune — particularly one taking place in an overly accommodative economic climate — could be just as dangerous.

“If the economy starts to pick up and the Fed is making cuts, maybe inflation could spike quite quickly … and business cycles tend to be choked off when you have too much inflation,” Detrick said. “That’s definitely a worry.”