The release of better-than-expected Nonfarm Payrolls data has not changed RBC economists' view that the Federal Reserve will begin cutting interest rates in June.
However, the risks now lean in favor of a delay.
Strong contracting tilts risks in favor of a delay
“Robust hiring in US labor markets has yet to abate, with payroll employment growth accelerating to 303,000 workers in March from already strong readings in previous months.”
“Despite the strength of the headline numbers, the Fed has pointed to other indicators, such as the declining attrition rate, falling job openings and moderating wage growth, as signs that tense market conditions labor are relaxing, and he has maintained the assessment that the risks of his dual mandate are being better balanced.”
“The more choppy the evolution of inflation (as it has been in early 2024), the longer the Fed will need to keep rates stable.”
“Our own baseline assumption is that the first rate cut will occur in June, with risks leaning towards a delay.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
