Odaily reported that Wall Street’s assessment of the Federal Reserve’s future interest-rate path is changing after the central bank released its latest rate decision. Citi has revised its forecast for the direction of Fed policy, moving its previously expected rate-cut timetable back by one month. The adjustment comes as officials’ stance has turned more hawkish.
Citi Moves the First Expected Cut to October 2026
Under Citi’s latest view, the Federal Reserve is expected to deliver one rate cut in October 2026 and another in December 2026, followed by a further reduction in January 2027. Citi’s previous base case had called for cuts to begin in September 2026, with three consecutive reductions scheduled for September, October and December.
In its report, Citi wrote: “Although Warsh did not explicitly mention it, he very likely agrees with our view that if officials had more time to digest the recent sharp decline in oil prices, many of the dots in the dot plot would have been lower.” The report indicates that Citi’s revised rate-path assessment takes into account officials’ remarks, the dot-plot projections and the recent movement in oil prices. The information was cited from Yahoo Finance.