Recently, economists at Citigroup Inc. and JPMorgan Chase & Co. revised their forecasts regarding the Federal Reserve's anticipated interest rate cut. Previously, both companies were part of a minority predicting a rate cut in July. However, following a reassessment, they have adjusted their expectations.

Citigroup's revision stems from the release of robust employment data for May, which exceeded expectations. As a result, the bank now anticipates that policymakers in the United States will enact their initial adjustments in September. Conversely, JPMorgan does not anticipate any alterations until November.

Andrew Hollenhorst, Citigroup's chief U.S. economist, elaborated on this change in a recent report. He indicated that they are altering their primary scenario for the first interest rate cut from July to September. Despite signs pointing to a slowdown in the labor market and broader economic activity within the U.S., Hollenhorst believes that the unexpected strength in employment growth last month will prompt the Federal Reserve to adopt a wait-and-see approach. They are likely to wait for additional data reflecting the pace of slowing activity and inflation before making significant policy adjustments.