Wall Street’s consensus on Federal Reserve rate cuts is fracturing, and Citigroup is planting its flag on the dovish side of the divide.
Andrew Hollenhorst, Citigroup’s chief US economist, is sticking with his forecast for three 25-basis-point rate cuts in September, October, and December 2026. That’s a total of 75 basis points of easing, a call that puts Citi meaningfully out of step with several major peers who have pulled back their expectations after May’s surprisingly strong jobs report.
The jobs report that spooked the doves
May 2026 delivered 172,000 nonfarm payroll additions, comfortably beating expectations. Goldman Sachs was among the banks that shifted their outlook in response, moving toward fewer or zero cuts for the year.
Hollenhorst sees it differently. His argument is that the current labor market strength is temporary, and he expects conditions to soften within the next three months.
Oil prices and the inflation wildcard
Hollenhorst isn’t relying solely on labor market softening to justify his call. He also points to recent declines in oil prices as a factor that reduces inflation risk, which could give the Fed more room to cut.
What this means for crypto and risk assets
A 75-basis-point easing cycle starting in September would represent a meaningful shift in the monetary landscape. Lower borrowing costs generally push capital toward riskier, higher-yielding assets. Bitcoin, Ethereum, and the broader digital asset ecosystem have historically benefited from these kinds of environments.
The divergence between Citi and Goldman on this question creates a useful framework for investors. It’s essentially a proxy for two very different economic scenarios: one where the economy is cooling and the Fed responds with easing, and another where growth remains resilient enough that the Fed stays on hold.
Rate cuts tend to weaken the US dollar, and a softer greenback has historically been a tailwind for Bitcoin, which many global investors view as a dollar-denominated store of value. If Citi’s forecast proves prescient, dollar weakness in the back half of 2026 could provide an additional catalyst for digital asset prices.