Citi Updates Fed Rate Cut Forecast for 2024
In a newly released economic outlook, Citigroup has revised its expectations for U.S. monetary policy. The bank now forecasts three 25-basis-point rate cuts by the Federal Reserve—in March, July, and September—shifting from its earlier projection of reductions in January, March, and September.
What’s Behind the Shift?
The change reflects stronger-than-expected inflation data and a resilient labor market in early 2024. While inflation is trending downward, persistent core price pressures have made the Fed more cautious about launching easing measures too soon.
Key Economic Indicators at Play
- GDP growth slowed to 1.8% in Q3, signaling cooling momentum
- Consumer spending shows modest expansion
- Job openings are gradually declining despite low unemployment
These dynamics increase the likelihood of a policy pivot later this year.
Market Implications Ahead
Should cuts materialize as expected, bond yields may decline further, supporting equity valuations—especially in growth and real estate sectors. The dollar could weaken, benefiting emerging market assets. Traders should watch upcoming PCE and jobs reports for confirmation of the Fed’s timing.