Citibank: Fed likely to keep rates steady amid rising oil prices

Citi Bank expects the Federal Reserve to keep interest rates unchanged at the upcoming meeting, despite rising oil prices, due to ongoing inflation slowdown and a weak labor market. The bank pointed out that markets are overestimating the likelihood of a rate hike, and that a decision to hold rates is often interpreted as a tilt toward monetary easing, which could pressure bond yields and the dollar. Some board members are still in favor of raising rates, but the current consensus shows a decreased likelihood of that happening, as inflation and the labor market continue to slow down. It is anticipated that the decline in inflation and the weak labor market will reduce the chances of a rate increase, and the Fed may even start cutting rates as soon as October.

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