Citi expects Fed to start cutting rates in June after soft PCE print
Citigroup strategists expect the Federal Reserve to start cutting interest rates in June, the bank said after the Personal Consumption Expenditures for February was relesed today.
The bank's economists are closely monitoring inflation dynamics, with particular focus on the core PCE price index, the Fed’s favored inflation metric as it directly tracks how much Americans spend on less volatile items.“We expect a stronger ~0.30% increase in core PCE in March given stronger medical and financial services,” Citi’s economists said in a separate note.
That said, the contrasting perspectives within the Federal Reserve highlight the challenge of navigating between inflation risks and indicators of a cooling labor market. Despite recent increases in inflation data, Powell's attention stays on the overarching theme of disinflation, indicating that he is ready to relax monetary policy further if inflation continues to moderate.
“We continue to expect officials will have enough evidence in inflation data to justify rate cuts starting in June, and that weaker labor market data will lead to 125bp total of cuts this year,” the team of analysts added.I don't think rate cuts should be made because this would be purely for the breed of markets not for the benefit of massesYou should worry about killing inflation so normal people can afford groceries and gas. Raise rates 100. Nip it in the bud.
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