Citi Sticks to Three Fed Rate Cut Forecasts Despite Robust US Jobs Data

Key Facts

In a move that reflects a contrarian view of US economic resilience, Citigroup economists have maintained their forecast for three Federal Reserve rate cuts in 2026. This projection persists despite May's employment data coming in stronger than anticipated, as the bank bets that the current labor market strength will eventually fade. According to reports, Citi analysts believe a looming slowdown in hiring will prompt the Fed to ease borrowing costs to safeguard the economy from a potential downturn.

This outlook comes as major banks diverge on policy expectations; analysts at JPMorgan and Goldman Sachs recently suggested in research notes that rate cuts might be delayed until the fourth quarter due to persistent inflation and wage growth. Per market data, the yield on the US 10-year Treasury note experienced significant volatility following the jobs report, highlighting investor uncertainty between robust economic prints and optimistic analyst forecasts for monetary easing.