US: NFP does not change the calculus for the Fed – TD Securities

Data released on Friday showed employers added 431K jobs during March in the US. The unemployment rate fell to 3.6%. According to analysts from TD Securities, today’s numbers reinforce the strength of the labor market. They forecast a 50 bp rate hike in May and June. 

Key Quotes: 

“We think today's report does not change the calculus for the Fed. We continue to expect the Committee to increase rates by 50bp in both May and June, and to deliver a 25bp hike at each meeting through February 2023.”

“The payroll report reinforces the strength in the labor market, and we continue to look for 50bp Fed rate hikes in May and June, and 25bp hikes thereafter until February 2023. This should maintain the bear flattening pressure on the curve. The next key event for rates will be next week's FOMC minutes, which we expect to contain more discussion of QT.”