Citigroup: Market may have over reflected expectations of Fed rate hike Driven by the hope of restoring maritime traffic in the Strait of Hormuz, US bond yields have fallen, but investors' expectations are still that the possibility of the Federal Reserve raising interest rates this year is higher than that of interest rate cuts. Citigroup analysts wrote that this expected reflection is incorrect. We believe that the risk balance is biased towards the other side, and the expectation of interest rate cuts may be reflected again in the coming weeks or months. Citigroup acknowledges that lower energy costs will allow the Federal Reserve to once again focus on stable unemployment rates and above target inflation, indicating that interest rates should be maintained at current levels. However, these analysts say that the fundamental risk "balance is biased towards the direction of weak labor markets and slowing inflation," making interest rate cuts the most likely next step.