JPMorgan and Citigroup, two big banks, have changed their predictions about what the Federal Reserve will do with interest rates. They used to think the Fed would lower rates in July, but now they say it might happen later. This change comes after new data showed that the job market in May was stronger than expected.
Citigroup now believes the Fed won’t cut rates until September, and JPMorgan thinks it might not happen until November. They say that even though the economy seems to be slowing down, the good job growth in May will make the Fed wait for more information before making a decision.
Citigroup now thinks the Fed will lower rates three times this year, while JPMorgan thinks it might only happen once this year, and then once every three months next year. This change in prediction has caused interest rates to go up, and it also means that traders expect the Fed to cut rates less than they did before.
Before this, many people on Wall Street thought the economy would do worse this year and expected the Fed to lower rates multiple times. But now, they’ve realized that the economy is doing better than they thought.
The Fed has been saying they want to be sure that inflation is under control before they lower rates. Some Fed officials have said they need to see more good inflation data before they decide to lower rates.
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