Low fire, low hire US NFP report prompts Fed rate cut hopes but April cut too ambitious

Today’s Payrolls report remained consistent with an economy in a “low fire, low hire” state. A relatively modest 50k net jobs were created last month, while there were some downward revisions to the previous month’s data.

This is admittedly low by recent standards, although it remains just about enough to keep up with the pace of growth in the labour force. We also saw a surprisingly large drop in the jobless rate, suggesting that while the tariffs and other prevailing headwinds may be leading to a hint of hiring hesitancy, they are not yet triggering mass layoff.

The dollar has come off a touch following the data, with futures now pricing in a modestly more aggressive pace of US rate cuts in 2026.

We think that more Fed cuts are on the way, but that officials will likely be content to sit on their hands for a little while yet. Markets currently see an April rate cut as effectively a coin-toss, which may be slightly ambitious should inflation remain firmly above the 2% target.