Citi Delays Fed Rate Cut Expectations, Now Sees Three Cuts in 2027
Summary
Citi economists revised their Fed policy expectations after stronger-than-expected August jobs data, now seeing three 25-basis-point cuts in 2027, compared with previous forecasts of cuts in October and December 2026 and January 2027. The bank's chief US economist noted that the expected seasonal rise in unemployment did not materialize, so the Fed has no urgent reason to cut rates. The report also mentioned that rate cuts could come earlier if the labor market weakens or if AI market sentiment cools and stocks decline.
Bubble analysis
This news is indirectly related to the AI bubble: it mentions that if AI market sentiment cools and stocks decline, rate cuts could come earlier, implying that an AI bubble burst could affect monetary policy, but the article itself provides no specific data on AI investment or valuations.
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