Moody’s Analytics chief economist Mark Zandi means the federal reserve should paused the rate-hike cycle amid slowing inflation and easing labor market conditions, but said cutting rates was out of the question unless the economy went into recession.

What happened: “If I were king, I would pause rate hikes. I think job growth is slowing down,” Zandi said told CNBC.

He pointed out that labor supply grew faster than labor demand in March – something that had happened for the first time since the peak of the pandemic shutdown – suggesting the unemployment rate would rise north.

“Then add the slowing inflation and the banking situation, that’s the recipe for a rate pause,” Zandi added.

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The economist also believes the risks are increasingly on the side of over-tightening. “The misstep here isn’t that the Fed isn’t raising rates enough to quell wage and price pressures, but that it’s raising rates too much and raising them too much and undermining economic growth,” he said.

Zandi believes this is the right time for the Fed to pause given the risk balance and all trendlines appear to be showing relative to jobs, inflation and significant uncertainty in the banking system.

“And if I’m wrong and the economy stays stronger, inflation stays more stubborn, they can start raising rates again later in the year,” he said.

US markets ended on a mixed note Monday as investors and traders started the week on a cautious note ahead of Wednesday’s CPI data, which will set the course for the future Those of the Federal Reserve next political decision.

The SPDR S&P 500 ETF Trust SPY closed 0.1% higher during the Invesco QQQ Trust Series 1 QQQ 0.05% lost.

For inflation: Zandi believes top-line inflation could rise to a little closer to 5% from 6% in February, and said Core inflation will moderate in the coming periods.

“I think what we can say with reasonably high confidence is that …