Citigroup economists lowered their expectations for the Federal Reserve to cut interest rates this year. The basic inflation data released earlier on Friday was higher than the bank's forecast.
They currently predict that the Federal Reserve will cut interest rates by 100 basis points starting in July this year. The previous forecast was to cut interest rates by 125 basis points starting in June.
“Given that prior to the FOMC June meeting, there was only one month's inflation data for April, officials may have to wait until July to gain 'greater confidence' that inflation is slowing,” Citigroup Veronica Clark, Andrew Hollenhorst, and Alice Zheng wrote in a report.
Although the March core personal consumption expenditure price data was rounded up in line with market expectations, Citi said that the 0.32% month-on-month increase in March was higher than the 0.26% expected by the bank.