economy

Citi Economist Signals End to Fed Rate-Hiking Cycle

Citi's chief US economist predicts the Federal Reserve will make one final rate increase before pausing its hiking campaign.

By Piggy PressSep 16, 20262 min read 3 new words

In simple terms

An end to rate hikes could ease pressure on household budgets for loans and mortgages, though it also reflects concerns about economic weakness that justified tightening in the first place.

Andrew Hollenhorst, chief US economist at Citi, has become the latest Wall Street voice to argue against further monetary tightening. In remarks cited by Bloomberg, he states that economic data do not currently justify additional rate hikes from the Federal Reserve. His assessment — that one more hike is likely but additional ones lack justification — reflects a growing consensus among economists and analysts that the Fed's aggressive rate-hiking cycle is nearing its end.

The implications matter for borrowers and savers alike. Mortgage rates, auto loan rates, and credit card APRs are closely tied to Fed policy; if rate hikes do indeed stop soon, borrowing costs could stabilize or even begin to decline over time. Conversely, savings account yields would also level off. For markets and investors, the signal is equally important: forward guidance from major bank economists often anchors expectations about inflation, growth, and central bank action.

Fun fact

The Fed raised rates aggressively from 2022 onward to combat inflation. Hollenhorst's 'one and done' outlook would mean the Fed is preparing to pivot from tightening to a holding pattern — a significant shift in monetary policy.

Economy

Source: Bloomberg Markets