Paulsen said the Fed is likely to be influenced as much if not more by government debt yield as it is the stock market. The benchmark 10-year note briefly touched an 11-month high yield Friday morning at 2.07 percent before pulling back.
Using funds it creates and adds to its $3 trillion balance sheet, the Fed is buying $85 billion a month in Treasurys and mortgage-backed securities. The purchases are part of what is known in market parlance as quantitative easing, or QE.
While the liquidity has coordinated tightly with market ups and downs, some Fed governors have begun to worry about unintended consequences such as inflation.
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The policy is tied to inflation and probably more so unemployment, which has showed steady gains in recent months and indicated that even if the growth isn't exactly robust, the jobs picture appears well past crisis levels.
"If continued, the strengthening in employment adds weight to views (ours included) that the Fed will taper off asset purchases this year, likely ending QE entirely in early 2014," Steven Wieting, economist at Citi Research, said in a note.
So while few traders said they see Fed stimulus ending anytime soon, a few more strong unemployment reports could force the market to start confronting the scenario.
"When you read through the report it's positive enough to give the Fed encouragement that they're doing the right thing," said Steve Blitz, chief economist at ITG. "When you get into the details, it's not positive enough to indicate that they're done."
Indeed, despite the encouraging headlines the underlying fundamentals reveal some weakness.
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The labor force continues to hold at generational lows as more people quit looking for jobs, while long-term unemployment remains elevated.
Job growth came from some unusual - and perhaps unsustainable - areas such as the motion picture industry, which added more than 20,000 to the total.
Also, the total job creation itself looks good by comparison to the past several years but remains considerably below the level needed to bring down the jobless rate anytime soon to the Fed's 6.5 percent minimum target it has set before tightening policy.
"The question is, how many more months of this do you have to see to be convinced that this is actually the underlying trend of job growth?" Jan Hatzius, chief economist at Goldman Sachs, said on CNBC's "Squawk on the Street" program.
"We've had accelerations in payroll growth before in this recovery. It's then proven to be short-lived," he added. "They want to see sustained growth in payrolls and they also want to see broader signs of improvement."
So despite the jobs numbers specifically and the economic data more broadly pointing up, the Fed is unlikely to take its foot off the pedal soon.
"It's going to take a couple of 300,000 (jobs) months in order for that to actually happen," said Michael Cohn, chief market strategist at Atlantis Asset Management in New York. "We're pretty far away from that."
—By CNBC's Jeff Cox. Follow him on Twitter at