Wall Street’s consensus on Federal Reserve rate cuts is fracturing, and Citigroup is planting its flag on the dovish side of the divide.
Andrew Hollenhorst, Citigroup’s chief US economist, is sticking with his forecast for three 25-basis-point rate cuts in September, October, and December 2026. That’s a total of 75 basis points of easing, a call that puts Citi meaningfully out of step with several major peers who have pulled back their expectations after May’s surprisingly strong jobs report.
The jobs report that spooked the doves
May 2026 delivered 172,000 nonfarm payroll additions, comfortably beating expectations. Goldman Sachs was among the banks that shifted their outlook in response, moving toward fewer or zero cuts for the year.
Hollenhorst sees it differently. His argument is that the current labor market strength is temporary, and he expects conditions to soften within the next three months.
