Citi Pushes Rate Cut Forecast to June 2027, More Pressure on Bitcoin
Citigroup has revised its forecast for the Federal Reserve's next interest rate cut to June 2027, citing stronger US jobs data that reduces concerns over the labor market. This move could put further pressure on Bitcoin and other cryptocurrencies.
The bank had previously expected the Fed to cut rates in October and December 2026 and again in January 2027 but has now replaced those calls with three reductions in June, September, and December 2027 after August payrolls came in well above forecasts. The unemployment rate remained at 4.1%, and the labor force participation rate rose by 0.2 percentage point.
Bitcoin initially fell below $80,000 as stronger jobs data raised rate hike expectations but later recovered above $86,000. Higher rates remain a pressure point for crypto, although ETF demand and short covering have helped Bitcoin withstand tighter Fed policy. The cryptocurrency briefly touched $87,000 this week, its highest level since late January.
Citi economists Andrew Hollenhorst and Veronica Clark said the figures suggested Fed officials would see employment conditions as broadly stable and focus more closely on inflation. However, new projections released with the decision showed that 16 of 18 Fed officials expected at least one more rate increase before the end of 2026.