Financial markets are pricing in the possibility that Kevin Warsh, the newly installed Federal Reserve chair, may have to push interest rates higher despite White House desires for cheaper money.Friday's stronger-than-expected jobs report reinforces the idea that the labor market is increasingly on solid footing, removing downside risks to its employment mandate. Now, it's all about inflation.By the numbers: Odds of at least one interest rate increase by year-end rose to 67% Friday, up from 45% last week, according to CME's FedWatch tool.Short-term U.S. Treasury yields, which are sensitive to changing expectations about Fed policy, jumped after the data release. The two-year Treasury yield climbed about 11 basis points, to 4.16%, the highest level in more than a year, reflecting expectations for higher rates.What to watch: "Today's solid payrolls release tilts the scales for us," BNP Paribas chief U.S. economist James Egelhof wrote Friday morning, noting the firm now expects a series of rate increases starting in December."This year's strong growth, gradually tightening labor market and persistently high inflation strikes us as markedly different to what officials expected when the Fed cut rates last fall, and we expect monetary policy to adjust accordingly," Egelhof wrote.