Citi says Wall Street wrong to slash Fed rate-cut bets
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Economists at Citigroup Inc are sticking by their forecast for five-quarter point cuts this year, despite other banks dialing back their forecasts for interest-rate cuts. Citigroup believes the Fed remains concerned about economic growth stalling and is eager to seize on any signs of disinflation or economic weakness. The bank's forecast contrasts with the broader sentiment in financial markets, where bond yields surged after last week's consumer price index report. Citigroup's economists believe upcoming readings of the core personal consumption expenditures index will show some cooling of price pressure, giving the Fed cover to begin adjusting policy rates lower starting in June or July. They also expect the Fed to give more weight to signs of economic weakness than to data showing continued strength.



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