Economists at RBC Capital Markets say that the coming week could prove to be pivotal for bond investors.

The big events for bond investors will be Tuesday’s meeting of the U.S. Federal Reserve, and Friday’s jobs data in the U.S. RBC says that Fed is expected to leave rates alone, but to change its assessment of the risks, warning that inflation may be on the horizon.

“While the Fed is unlikely to give the impression that they are impatient to raise rates, they are likely to convey the impression that they are a lot less patient than has previously been the case. At very least the statement will confirm the view that rates are likely to start rising from Q3 this year,” it predicts.

The Fed’s view may be short lived however, it warns, as Friday’s payrolls report can “either confirm the jobs recovery story or destroy it”. If it reports more than 200,000 jobs, RBC says this would cement the view that the Fed is unlikely to wait as long as September. “Indeed, a stronger print of 250,000 or above would leave June as a real possibility.”

“We see the combination of the Fed’s statement and the payrolls confirming a [third quarter] tightening, but not significantly increasing the case for an earlier move,” it concludes.