Citigroup pushes back Fed rate cut timeline after strong US job numbers
Downside risks for the labour market are mounting from a war with Iran that has no clear end in sight
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[NEW YORK] Citigroup has pushed back its Fed rate-cut timeline, citing unexpectedly strong US job gains and persistent inflation risks.
The Wall Street brokerage now expects a total of 75 basis points of rate cuts in September, October and December instead of June, July and September, based on a note dated Apr 3.
“We continue to think signs of a weakening labour 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.
US job growth rebounded more than expected in March as a strike by healthcare workers ended and temperatures warmed up, but downside risks for the labour market are mounting from a war with Iran that has no clear end in sight.
Citigroup says weak hiring will push the unemployment rate higher in the summer, similar to the last few years. REUTERS
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