Citigroup now expects the U.S. Federal Reserve to raise its key interest rate by 25 basis points in November, compared with its previous forecast of a September hike.
According to Citigroup economists led by Andrew Hollenhorst, the recent inflation data raised expectations that the Fed would "pause" during the policy meeting next week.
"The slightly stronger-than-expected reading is likely to keep the Fed leaving the 2023 median 'dot' unchanged," Citigroup economists wrote in a note dated Wednesday.
Traders see a 97% chance of the Fed holding rates in September and a near 60% likelihood of a November pause, the CME FedWatch Tool data showed.