Citigroup Delays Fed Rate-Cut Forecast to October, December 2026 and January 2027
C•Citigroup delayed its forecast for Fed rate cuts by one month, now projecting 25-basis-point reductions in October and December 2026 and a further cut in January 2027. The bank warned that the Federal Reserve’s removal of forward guidance will heighten market reliance on economic data and policymakers’ speeches.
1. Citigroup Revises Fed Rate-Cut Projections
Citigroup has pushed back its timeline for Federal Reserve easing by one month, now forecasting 25-basis-point cuts in October and December 2026 and an additional cut in January 2027. The bank previously anticipated rate reductions starting in September 2026, underscoring its more cautious outlook on monetary policy.
2. Heightened Market Focus on Data and Speeches
Following Fed Chair Kevin Warsh’s decision to eliminate forward guidance, Citigroup warned that investors will need to rely heavily on incoming economic data and policymakers’ public remarks to gauge the policy path. This shift is expected to amplify market volatility around Fed speeches and key economic releases.
3. Broker Forecasts and Trading Implications
Other major brokerages like Nomura and Bank of America have echoed a more hawkish stance, warning of potential rate hikes this year, while traders increased odds of a September rate increase to roughly 50%. Barclays has extended its outlook for steady rates through next year, reflecting rising uncertainty over the central bank’s policy trajectory.
