Fed still on track to cut rates by 125 bps in total for 2024 - Citi
Citi maintains its forecast for the Federal Reserve to cut rates by a total of 125 basis points in 2024, with a 50 basis point cut expected in November and a 25 basis point cut in December. This outlook reflects a shift from previous expectations, emphasizing the Fed's commitment to avoid falling behind on rate adjustments amid balanced risks of a softening labor market.
As such, they are maintaining their outlook for the Fed to cut by 50 bps in November before closing things out with a 25 bps cut in December. The latter is changed as Citi did previously expect the Fed to go by 25 bps yesterday before moving by 50 bps in November and December. But the total in terms of how much the Fed is cutting remains the same.
“Powell noted a number of times that today’s 50bp cut is a “commitment” to not get behind the curve which suggests the bar for further large rate reductions is very low. We continue to see risks as balanced toward a more rapid softening of labor market data and a more aggressive pace of rate cuts."
