JPMorgan and Citi both change their guesses about when the Federal Reserve will lower interest rates


The stronger-than-expected employment numbers from today prompted JPMorgan and Citi to adjust their interest rate predictions.

Economists at Citigroup Inc. and JPMorgan Chase & Co. downgraded their predictions for the Federal Reserve’s interest rate reduction. These businesses have suddenly altered their predictions; they were among the last economists to anticipate a rate decrease in July.

The bank has revised its prediction to show that US officials would initiate action in September, as opposed to JPMorgan’s November outlook.

It may take longer than three months for the “broader” labor market deterioration that the Fed warns might need a rate decrease to come to fruition, according to Michael Feroli, top U.S. economist at JPMorgan.

In September, November, and December of this year, Citigroup predicts a rate drop of three quarters of a point each. This is a departure from the four prior cut predictions, made at each of the four policy meetings held by the Fed between July and December. This year, JPMorgan only expects one discount every three months, and next year, they expect one discount per quarter.

Earlier this week, at least four big Wall Street banks predicted that the Federal Reserve will drop interest rates for the first time in December, while six additional significant Wall Street banks said that the Fed would cut rates in September.

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