(Dow Jones)–Bond investors “need to be ‘practical’,” AmeriVet’s Gregory Faranello says in a note. “There is no reason to question the Fed.” He says that markets have grown used to easy money and adjusting could be difficult. Faranello says it is clear that the Fed wants to take the fed funds rate to a 5%-5.25% range–from the current 4.5%-4.75%–and hold. Markets are pricing in this terminal rate after Friday’s jobs report, but are still betting on cuts starting later this year, according to the CME’s FedWatch tool. “The Fed will be battling these markets all year,” Faranello writes.

By: Paulo Trevisani (paulo.trevisani@wsj.com; @ptrevisani)