Traders of short-term interest-rate futures on Friday now expect the Federal Reserve to cut interest rates just one time this year, backing away from earlier bets on two rate cuts starting in June, after government data showed the labor market remains strong and a closely-watched survey showed a jump in consumers' inflation expectations.

The January jobs report revealed a drop in the unemployment rate to 4%, accompanied by payroll gains of 143,000. A Fed interest rate cut in March is now very unlikely.

The central bank is grappling with how quickly to lower interest rates after pausing cuts last month.