Strong US employment data prompts Citigroup to delay expectations for Fed interest rate cuts

MaticHoleFiller · 2026-04-06T07:23:48+00:00

Citigroup has delayed expectations for Federal Reserve rate cuts due to unexpectedly strong US job growth and persistent inflation risks. According to a recent report from the bank, this Wall Street brokerage now expects the Fed to cut interest rates by a total of 75 basis points in September, October, and December, rather than the previous forecast of June, July, and September. Citigroup stated, "We still believe that signs of a weakening labor market will lead to rate cuts later this year. However, the upcoming data releases suggest that the timing of rate cuts will be later than we previously anticipated." As healthcare strikes end and temperatures rise, US job growth in March rebounded more than expected; however, ongoing conflicts with Iran, with no clear signs of resolution, are increasing downside risks to the labor market. Citigroup noted that weak hiring will push unemployment higher during the summer, similar to patterns seen in recent years.

MaticHoleFiller

2026-04-06 07:23:48

Citi Group postponed its expectations for when the Federal Reserve will cut rates, citing unexpectedly strong U.S. job growth and persistent inflation risks. According to a report the firm released recently, the Wall Street brokerage currently expects the Fed to cut rates cumulatively by 75 basis points in September, October, and December—rather than the previously expected June, July, and September. Citi said, “We still believe signs of weakening in the labor market will lead to rate cuts starting later this year. But the timetable for the data that is about to be released indicates that the start of rate cuts will be later than our prior expectations.” As a labor strike by medical personnel ended and temperatures rose, U.S. employment growth rebounded in March by more than expected; however, a conflict with Iran with no clear sign of an end is increasing the downside risks facing the labor market. Citi said that weak hiring will push up the unemployment rate in the summer, similar to what happened in the past few years.

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Byline: Wang Yongsheng

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