US Fed Will Not Cut Interest Rate, Says Citi
Major U.S. bank Citi has reiterated its prediction that the Federal Reserve will not cut its interest rate in 2019, CNBC reports June 20.
Catherine Mann, global chief economist at Citi told CNBC that the bank is maintaining its call that a decrease in the Fed's key interest rate will not take place in 2019.
While acknowledging that a cut is still “substantially probable,” Mann explained that Citi “continues to think markets are priced for more near-term accommodation than appropriately probability-weighted scenarios would suggest.”
On June 4 Fed chairman Jerome Powell said that the central bank is considering decreasing its interest rate.
Soon after Powell’s statement, the Labour Department revealed weak job market numbers in its report, leading multiple industry experts to conclude that an interest cut by the Fed is now very likely.
Among the banking industry commenters that do expect one or several interest cuts this year are Bank of America economists Joseph Song and Michell Meyer, and Barclays Plc economists Michael Gapen and Jonathan Millar.
Multiple experts have predicted the Fed to make two cuts in 2019: 0.25%-to-0.5% in July, followed by another 0.25% decrease in September.
As of press time, the Fed's interest rate is at 2.5%, last raised in December 2018 from 2.25%.