Citigroup economists led by Andrew Hollenhorst are sticking with their forecast for three 25-basis-point Federal Reserve rate cuts in 2026, targeting September, October, and December. This call stands alone as other banks retreat from easing expectations after May's nonfarm payrolls report surpassed all Bloomberg survey estimates.
The US added 172,000 jobs in May, and the unemployment rate held at 4.3%. Hollenhorst acknowledges the Fed will likely focus on inflation risks at the June 16-17 meeting, but expects the labor market to soften significantly over the next three months, opening the window for cuts on schedule.
Bitcoin dropped roughly 0.8% after the jobs report. If Citi's forecast proves correct, three cuts totaling 75 basis points would likely revitalize appetite for speculative assets. The next major catalyst is the Fed's June meeting, where any hint of openness to cuts could trigger swift reactions across digital asset markets.