Citi sees the Fed, the ECB, and the BOE all cutting rates in September

Citi sees the Fed, the ECB, and the BOE all cutting rates in September

In its report on the global economic outlook, Citi economists said they expect the Federal Reserve , the European Central Bank , and the Bank of England will all cut interest rates in September.

Earlier this month, the ECB cut its deposit rate by 25 basis points, however, the move was accompanied with relatively hawkish communication. “To be clear, this call for synchronized September cuts reflects our reading of domestic inflation pressures in each economy,” economists said in a note. In the Eurozone, the ECB's decision to cut rates was driven by the need to address wage inflation and the overall economic recovery. The euro-area economy appears to be in a restrained recovery phase, influenced by ongoing monetary restrictiveness and less accommodative fiscal policies. Citi forecasts at least two more ECB rate cuts this year, with a terminal rate of 2%.

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