Citi Pushes Back Fed Rate Cut Forecast to 2027
nashnova research
Citi pushed its first Fed rate-cut call from October 2026 to June 2027 after August payrolls beat expectations, signaling the labor market is too resilient for near-term easing.
What exactly did Citi change?
Old call: one cut each in October and December 2026, another in January 2027.
New call: all three pushed back — 25 bp each in June, September, and December 2027.
This means → Citi sees the Fed standing pat through all of 2026, delaying the easing cycle by at least eight months.
Why did one jobs report shift the timeline?
August nonfarm payrolls came in at 162,000 — well above consensus — with unemployment steady at 4.1%.
Citi economists Andrew Hollenhorst and Veronica Clark noted that labor-force participation rose notably, a sign the job market is not softening.
In plain terms = the Fed cuts when the economy cools; this report says it hasn't — so the case for easing weakens.
How did markets react?
After the data, fed-funds futures priced a 61% probability of a hike at the September 15-16 meeting, up from 52% beforehand.
This means → markets are no longer debating *when* the Fed cuts — they are debating whether it raises again.
What comes next?
Next week's CPI and PPI releases are the next key checkpoint for the Fed's policy path.
If inflation stays elevated, Citi's already-dovish forecast could face another hawkish revision.
This reflects the market's core tension: employment is holding up, inflation has not retreated, and the Fed has no pressing reason to ease.
市场有风险，内容仅供研究参考，不构成投资建议。