Major financial institution Citigroup has revised its predictions for when the Federal Reserve will begin cutting interest rates, moving the expected timeline from summer to fall following robust employment figures and ongoing inflation concerns.
In a research note released April 3rd, the prominent Wall Street firm adjusted its forecast to anticipate three quarter-point rate reductions occurring in September, October, and December, rather than the previously predicted cuts in June, July, and September.
“We continue to think signs of a weakening labor market will result in cuts later in the year. But the timing of upcoming data suggests a later start to rate cuts than we had previously been expecting,” Citigroup said.
The revision follows March employment data that showed job creation bouncing back beyond forecasts as a healthcare workers’ strike concluded and warmer weather conditions returned. However, analysts warn that labor market challenges may emerge due to ongoing international conflicts with uncertain resolution timelines.
The financial services company anticipates that reduced hiring activity will drive unemployment rates upward during summer months, following patterns observed in recent years.
