Citi: Fed Minutes May Signal End of “Wait-and-See” Period by Late Summer

Key Points:Citi analysts expect the Fed’s June meeting minutes to align with Powell’s recent testimony.Interest rate trajectory will depend on June–August data.A rate cut in September remains possible if inflation stays controlled and job growth is stable.Citi analysts believe the minutes from the U.S. Federal Reserve’s June policy meeting may reflect a stance similar to that of Fed Chair Jerome Powell's recent congressional testimony—indicating a data-dependent approach and suggesting that the Fed’s “wait-and-see” period could conclude by late summer.According to Citi, the minutes are likely to emphasize that the future path of interest rates will depend heavily on economic data released in June, July, and August. This aligns with Powell’s message to lawmakers, where he noted that interest rate decisions will be guided by incoming inflation and employment data.Powell’s remarks suggested that the Federal Open Market Committee (FOMC) is preparing for a possible rate cut in September, contingent on certain conditions being met. These include:Tariff-related price increases not leading to persistent inflation.Continued job growth sufficient to prevent a sharp rise in unemployment.Citi noted, “The ‘wait-and-see’ period may end in late summer,” implying that a clearer monetary policy direction could emerge ahead of the Fed's next policy meeting on July 30–31, followed by key data releases in August.