Fed to Hold Rates Steady Through December, Citi Predicts Rate Cut Resumption in 2027

Citi, a prominent financial institution, has made some bold predictions about the Federal Reserve's future monetary policy decisions. According to Citi, the Fed is unlikely to raise its benchmark interest rate again this year.

The bank expects the Fed to leave rates unchanged in October and December, allowing policymakers to assess how the recent rate hike affects the U.S. economy and inflation. This move would be a significant shift from previous decisions, which have seen rates increase in an effort to combat rising prices.

Citi's forecast suggests that even if inflation data continues to show a gradual cooling trend, the Fed will maintain its current stance rather than shifting monetary policy immediately. However, the bank does predict a possible change in direction by 2027, with rate cuts potentially resuming as early as June of that year.