Citi Still Expects Fed Cuts Later This Year After Wednesday's Rate Hold
After the Federal Reserve said on Wednesday that it would keep rates unchanged, Citi still expects the Fed to cut rates later this year. Economists Andrew Hollenhorst and Veronica Clark said in a note to clients that Powell’s press conference sent two dovish signals: first, he said he would look at a broad range of data to assess the Fed’s progress in curbing inflation; second, he suggested that higher real yields have already tightened financial conditions to some extent. Citi still expects the unemployment rate to rise in the coming months, which it says will lead the Fed to cut rates in October, December, and January next year.