Neil Dutta, head of economic research at Renaissance Macro, says "the U.S. labor market is on fire" and the end result is likely to be a more aggressive Federal Reserve.

Dutta's commentary comes after Friday's Jobs Report, which saw the unemployment rate drop to 5.5 percent. 

As Dutta notes from the report, employment is up in nearly every sector, including government payrolls.

Where it's down (like in mining) the drop is not significant enough to drag down the larger economy.

While average hourly earnings are soft, they are still up 2 percent year over year, and incomes are up. And on top of all that, underemployment measures are improving even faster than the top line numbers.

What's more, Dutta argues that monetary policy is likely to reflect this new reality, saying "the economy is normalizing as monetary policy remains far from normal."

He suggests that either the policy will get in line with the economy, or the economy will lag and end up reflecting the current policies, but says a "more aggressive Fed" is the more likely scenario.