Citi Delays Fed Rate-Cut Call to October, Sees Odds of 2025 Hike Rising
Summary
- Citigroup pushed back its forecast for a Federal Reserve rate cut by one month, from September to October.
- Nomura and Bank of America maintained their forecasts that the Fed would not cut rates this year, while saying the odds of a rate increase before year-end had risen.
- CME FedWatch showed the probability of a September rate increase jumping to 50%% from 27%%, as markets reacted quickly to the Fed’s hawkish stance.
Forecast Trend Report by Period
Citigroup has pushed back its forecast for the Federal Reserve’s first interest-rate cut by one month.
Reuters reported on June 18 that Citi now expects the Fed to cut rates by 25 basis points each in October and December, followed by another cut in January 2026. It had previously projected cuts in September, October and December 2025.
The change reflects a more hawkish shift by the Fed. Citi had been viewed as one of the major investment banks with a relatively dovish outlook on the central bank’s policy path.
Nomura and Bank of America maintained their forecasts that the Fed will not cut rates this year. After the Fed’s rate decision on June 17, the two firms said the likelihood of a rate increase later this year had grown.
Markets reacted swiftly. CME FedWatch showed the probability of a September rate increase rose to 50%, up from 27% a day earlier and nearly double in a single day.
JOON HYOUNG LEE
gilson@bloomingbit.ioCrypto Journalist based in Seoul
