TechFlow news, according to Jinshi Data, Citigroup Research analysts expect the Federal Reserve to begin aggressive interest rate cuts in the coming months, continuing through next summer. According to a report released last Friday, Citi anticipates the Fed will cut rates by 25 basis points at each meeting starting in September through July 2025—eight consecutive cuts—bringing the benchmark rate down from 5.25%-5.5% to 3.25%-3.5%.
Citi analysts noted that the U.S. economy has cooled from its strong 2023 growth pace and inflation is resuming its downward trend. The ISM Services Index has entered contraction territory and the unemployment rate has risen to 4.1%, increasing the risk of a sharp economic slowdown and faster-paced rate cuts.
Andrew Hollenhorst, Citi's chief U.S. economist, said ongoing weakness in economic activity would prompt the Fed to lower rates at each of the following seven meetings. He added that a sharp economic downturn could generate sufficient political consensus to push for increased government spending to stimulate the economy.
