Citi Sees December Fed Rate Hike After Hot Inflation
Citigroup now expects a quarter-point December increase, while markets have also raised the odds of an October move.
Key takeaways
- Citigroup expects the Fed to raise rates by 25 basis points in December.
- Citi does not expect rate cuts to begin before June 2027.
Citigroup now expects the Federal Reserve to raise its policy rate by 25 basis points in December, according to Bloomberg HT, after U.S. September inflation exceeded market expectations.
The bank expects rates to remain unchanged after that increase and does not expect rate cuts to begin before June 2027. It had previously forecast no further rate changes this year.
Markets were pricing in about a 94% chance of a December increase. CME Group’s FedWatch tool showed the probability of a hike at the Fed’s October 27-28 meeting rising to 47.1% after the inflation data, from about 22% beforehand.
This article was produced with the help of AI technology. Based on reporting by the outlets listed above.
