Citigroup "Fed may follow this week's cut with additional cuts in January and March"

On the 8th (local time), according to the economic breaking account Walter Bloomberg, U.S. Citigroup (Citi) economists said that if the Federal Reserve (Fed) cuts its policy rate this week, it could lead to additional cuts in January and March next year. However, they said that delays in key economic data releases due to the federal government shutdown could constrain the Fed's ability to provide concrete guidance on its future policy path.

Citigroup assessed that, amid gaps in recent macro indicators such as employment and inflation, the Fed is likely in the short term to continue a course of adjusting rates that prioritizes managing downside risks to the economy. However, they also noted that in the absence of sufficient accumulated data, the Fed may reinforce a "meeting-by-meeting" message and may not give clear signals on the timing and magnitude of additional cuts.

Markets are watching whether the Fed's policy decision this week will provide hints about the year-end and early-year rate path. In particular, given delays to data releases caused by the shutdown, it will be crucial how the Fed explains the timing for obtaining the data needed for policy judgments and the speed of its future decision-making.