Wall Street strategists don't see Fed cutting rates in June after strong CPI data

Following Wednesday's hotter-than-expected CPI data and the FOMC minutes, analysts at investment banks Citi, UBS, and Goldman Sachs have said they don't see the Federal Reserve cutting rates in June.

"'Generally' Fed officials did not have more confidence after the January and February inflation prints, and today's strong March CPI print would have not increased that confidence either," analysts at Citi said."This makes the case for preemptive cuts more difficult.

"Today, inflation data was higher than expected, with both headline and core CPI rising 0.4% month over month. In our view, this data makes a June rate cut unlikely," analysts at UBS said."Today's CPI data should be particularly troubling for the Fed. They have been saying that it would not be appropriate to cut rates until they gained further confidence that inflation was moving sustainably toward their 2% target.

Analysts at Goldman Sachs have pushed back their forecast of the first rate cut from June to July, stating they"continue to expect cuts at a quarterly pace after that, which now implies two cuts in 2024 in July and November."

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