The release of stronger-than-expected Nonfarm Payrolls data has not changed the view of economists at RBC that the Federal Reserve will start cutting interest rates in June. 

Risks are, however, now tilted in favor of a delay. 

Robust hiring means risks tilting to a delay

“Robust hiring in US labor markets has yet to let up with payroll employment growth accelerating to 303k in March from already solid readings in the months before.” 

“Despite solid headline numbers, the Fed has been pointing to other indicators such as lower quit rate, falling job openings and moderating wage growth as signs of tight labor market conditions unwinding, and has maintained the assessment that risks with its dual mandate are coming into better balance.”

“The choppier the progress with inflation (as it has been in early 2024), the longer the Fed will need to hold rates steady.”

“Our own base-case assumption is that the first rate cut will come in June, with risks tilting to a delay.”