Citigroup Delays Fed Rate Cut Forecast to June 2027 Amid Strong Jobs Data

By EC Assets · Published 4 September 2026

Citigroup revised its forecast for a U.S. Federal Reserve interest rate cut, now expecting the first reduction in June 2027. This delay follows a strong U.S. jobs report. The firm previously projected an earlier rate cut. The strong jobs report has shifted market expectations. The two-year Treasury yield rose to its highest level since January 2025. This increase in yields occurred after the report boosted expectations that the Fed could raise rates. Stock markets reacted to the jobs report, with the Dow, S&P 500, and Nasdaq edging lower. These movements were fueled by renewed bets on a Fed rate hike. The strong jobs report has brought a Fed rate hike back into focus for some observers. Former President Trump has commented on Fed policy. He stated that the Fed should slash rates. Trump threatened to end trade with countries that hold U.S. surpluses if rates are not lowered. In separate corporate news, Citigroup plans to redeem $3.15 billion in notes due in 2027. The company announced this full redemption. Citigroup also initiated a positive catalyst watch on H&M. This watch precedes the retailer's third-quarter results, which are due next month. Citi maintains a Neutral rating on H&M shares. The firm raised its price target for H&M to 171 Swedish krona. The revised forecast from Citigroup highlights the influence of economic data on monetary policy expectations. A robust labor market report suggests inflationary pressures might persist, potentially compelling the Fed to maintain higher rates for longer, or even consider further hikes. This scenario contrasts with earlier expectations for rate cuts. Market participants will continue to monitor upcoming economic indicators. Further data on employment, inflation, and economic growth will likely shape Federal Reserve decisions and subsequent analyst forecasts. Investor sentiment will remain sensitive to statements from Fed officials. This article is intended for informational purposes only. It does not constitute investment advice.