Key facts
- U.S. employers added 162,000 jobs in August, exceeding expectations.
- The unemployment rate held steady at 4.1% in August.
- Citigroup has pushed back its forecast for the Federal Reserve's next interest-rate cut to June 2027.
- The brokerage now expects rate reductions in June, September, and December of 2027.
- Market expectations for a September Fed rate hike increased to 61% probability.
Citigroup has revised its forecast for the Federal Reserve's next interest-rate cut to June 2027, citing a robust U.S. jobs report for August. The brokerage's economists noted that the labor market appears stable, shifting the focus to inflation outlooks. The August jobs data showed 162,000 nonfarm payroll additions, surpassing expectations, while the unemployment rate remained unchanged at 4.1%. This strong performance has led to increased market expectations for a potential Fed rate hike at its upcoming September meeting. Citigroup's updated outlook now includes rate reductions in June, September, and December of 2027, a shift from its prior forecast.