Citi: Fed expected to cut rates by 25 bps at every meeting until July next year
A team of Citi economists led by Andrew Hollenhorst said that an easy labour market will ease inflationary pressures in the service sector and weak global conditions will dampen commodity prices. This will lead to an aggressive line from the Fed, which is expected to cut rates by 25 basis points at each meeting until July next year, bringing the federal funds rate down to between 3 per cent and 3.25 per cent. This is well below market expectations, which expect the federal funds rate to reach around 4 per cent by then.
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