The Federal Reserve's hawkish stance reshapes market expectations, prompting Citi to postpone its rate cut timetable overnight.

Odaily reported that after the Federal Reserve announced its latest interest rate decision, Wall Street's expectations regarding its interest rate trajectory are shifting. Citigroup has adjusted its forecast for the direction of Federal Reserve policy, pushing the previously expected timeline for rate cuts back by one month. This revision comes amid a more hawkish stance from officials.

According to Citigroup's latest assessment, the Federal Reserve may implement rate cuts in October and December 2026, and continue to lower rates in January 2027. Previously, Citigroup's baseline scenario was for consecutive rate cuts in September, October, and December 2026, starting from September.

Citigroup noted in its report: “Although Waller did not explicitly mention it, he likely agrees with our view that if officials had more time to digest the recent substantial drop in oil prices, many of the forecasted dots in the dot plot would have been lower.” (Yahoo Finance)