Citi traders are betting Fed will keep rates on hold this week
Published Mon, Jul 27, 2026 · 11:14 PM
[WASHINGTON] Citigroup’s traders are betting the Federal Reserve will leave rates unchanged this week, even as the swap markets assign a more than one-in-three chance of a quarter-point hike.
With “high conviction” Citi is receiving the July FOMC contract – a position that will profit if the central bank keeps rates steady, according to Akshay Singal, global head of short-term interest-rate trading at the US bank.
Swap markets are currently assigning an almost 40 per cent likelihood of a 25 basis point hike from the Federal Reserve this week. It comes after flaring Middle East tensions fuelled volatility in oil prices and Treasury yields, heightening inflation worries.
“We are still firmly expecting a hold,” Singal said in comments to Bloomberg News. Fed Chairman Kevin Warsh “has been explicit – he wants the market to focus on data, which tells us that the Fed doesn’t need to be hiking yet,” he added.
Singal said that Warsh has added to market uncertainty with his opposition to forward guidance, something the chairman sees as “not well-suited to the current policy conjuncture.”
Market pricing for a Federal Reserve decision is closer to an even split than at any time since September 2024, according to Singal. Back then, traders assigned roughly equal odds to a 25-basis-point and a 50-basis-point rate cut.
“The market doesn’t have anything to hold on to,” said Singal. “We expect that there will be a healthy and vibrant discussion that ends with a hold.” BLOOMBERG
