Citi Economist Predicts More Aggressive Fed Rate Cuts on Weakening Employment Data

Citi economist Robert Sockin predicts the Federal Reserve will implement interest rate cuts totaling 125 basis points by the year`s end, driven by concerns over rising unemployment. This projection surpasses current market expectations of a 100 basis point reduction. Sockin suggests an initial 50 basis point cut followed by another 50, with a possible additional 25 basis point cut in December. He emphasizes that the Fed`s actions hinge on upcoming employment data, particularly the unemployment rate. While investors anticipate a 25 basis point cut in September, Sockin believes weaker employment figures could prompt the Fed to take more aggressive measures. Federal Reserve Chair Jerome Powell has signaled a readiness to cut rates in September, emphasizing data dependency in determining the extent and pace of adjustments.