Citigroup announces that the threshold for interest rate cuts is decreasing.

Citigroup analysts state that the upcoming minutes from the Federal Reserve's June 17-18 meeting may read more dovishly, indicating that the threshold for interest rate cuts is decreasing. Citigroup believes that although Powell maintained a neutral stance during the press conference following the June interest rate decision, the minutes can better reflect the content he did not explicitly state. Recently, several Federal Reserve officials have released dovish signals, and as of June 2025, the year-on-year increase in the U.S. core PCE price index has been below the 2% target threshold for three consecutive months, providing arguments for dovish perspectives within the Federal Reserve. Citigroup expects the Federal Reserve to start cutting interest rates in September and to cumulatively cut rates by 125 basis points before March next year, with the “waiting period” for rate cuts possibly ending in late summer. However, the minutes may also reflect some officials' hawkish views, such as Cleveland Fed President Hammack suggesting that policy rates may remain at current levels for an extended period. Still, Citigroup believes this is not the basic scenario of the committee, as “most” Federal Reserve officials expect to lower policy rates before the end of the year. $BTC