Citi Drops Rate Cut Bomb

Says Fed Will Cut 8 times for 2 full percentage points

Chair Powell’s dovish comments in Sintra together with recent data suggest a first rate cut is very likely in September. A continued softening of activity will provoke cuts at each of the subsequent seven Fed meetings, in our base case.

Contents:

1. Bottom Line:

2. Implications:

3. Citi's Forecast of 8 Rate Cuts

   1. Introduction

   2. Citi’s Prediction: An Overview

   3. Key Drivers Behind the Forecast

   4. Expected Economic Impact

   5. Economic Charts

   6. Fed Charts

4. Election Update

Bottom Line:

CITI lays out the drivers behind their opinion the Fed will cut a total of 8 times for 2 full percentage points by mostly focusing on the economic slowdown indicators with a heavy emphasis on unemployment followed by manufacturing data like PMI/ISM. The also believe disinflation will experience more tailwinds pushing it lower. We broke it down in short form and included the rest of the charts at bottom.