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2026-09-17 16:16:11
[Citigroup Expects Fed to Hold Rates Steady in October and December, Resuming Rate Cuts in June 2027] ⑴ Citigroup released a research report stating that the Fed's 25 basis point rate hike, which is expected to result in a relatively moderate month-on-month increase in core inflation in the coming months, surprised Fed officials and did not anticipate a significant acceleration in economic growth. The report anticipates the Fed will maintain interest rates unchanged in October. ⑵ The bank stated that, contrary to Chairman Warsh's description of the labor market, recent moderate hiring growth and low unemployment are merely due to a rapid decline in the labor force participation rate, and do not equate to accelerating labor demand. ⑶ The bank expects the Fed to wait for more data after October to assess the impact of the 25 basis point policy rate increase, and then hold rates steady again in December. At that time, a series of relatively moderate inflation data should provide sufficient evidence that inflation is slowing, supporting the Fed's decision to maintain interest rates unchanged again. ⑷ With inflation continuing to cool, Citigroup expects the Fed to resume rate cuts in June 2027.
