Citigroup delays Fed rate-cut forecast to June 2027 after jobs report

  • Citigroup delayed its forecast for Federal Reserve rate cuts until June 2027.
  • 162,000 jobs were added in August, versus economists’ expectation of roughly 56,000.
  • Citi now forecasts quarter-point cuts in June, September and December 2027.

Citigroup has pushed back its forecast for the Federal Reserve to resume cutting interest rates to June 2027 after a stronger-than-expected August jobs report. The bank now expects 25-basis-point cuts in June, September and December 2027, replacing its earlier call for cuts in October and December 2026 and January 2027. Employers added 162,000 jobs in August, compared with economists’ expectations of roughly 56,000, while unemployment held at 4.1% and labor-force participation rebounded. The labor market’s stability has undercut Citi’s previous expectation that unemployment would rise significantly over the summer, as it did in 2024 and 2025. Cooler underlying inflation, wages and core consumer prices remain the bank’s main case for eventual monetary easing. Citi expects core CPI to increase 0.18% month over month, supporting a Federal Reserve pause at its September 15-16 meeting, and anticipates a substantial downward revision to core PCE inflation later this month that could produce a more dovish change to the Fed’s Summary of Economic Projections. Market pricing shifted after the employment report, with fed funds futures assigning about a 61% probability to a 25-basis-point rate hike at the September meeting, up from 52%. August inflation data will therefore be closely watched, with economists expecting headline CPI to rise 0.4% month over month, core CPI to increase 0.2% and producer prices to rise 0.4%. Investors will assess whether disinflation is continuing or persistent price pressures could keep rates higher for longer.

本网站上的信息是使用AI生成的,我们无法保证其准确性。 请仅作为参考信息使用。