Emerging
Jun 19, 20261
61%
BofA’s Caban: US Employment Running Above Breakeven, Supports Later Rate Cuts
BofA Securities analyst Mark Cabana stated the US is running above breakeven employment, supporting a delayed rate cut timeline. Citigroup revised its Fed rate cut forecast to October, a month later than before, following the central bank's updated projections and decision to hold rates steady.
Quick Facts
Who
Mark Cabana
What
discussed employment breakeven levels
When
2026-06-19
Where
United States
- discussed employment breakeven levels
- revised interest rate cut forecast to October
- Fed left rates unchanged
- Fed released revised projections
- Mark Cabana
In a recent appearance on Bloomberg's "Real Yield" program, Mark Cabana, co-head of global rates research at BofA Securities, commented that the US economy is currently operating above breakeven employment levels. This assessment aligns with a revised forecast from Citigroup, which now expects the Federal Reserve to begin cutting interest rates in October, a month later than previously anticipated.
The updated forecast comes after the Federal Reserve released its revised economic projections on Wednesday, concurrent with its decision to maintain current interest rates. The central bank's updated outlook suggests a cautious approach, as policymakers weigh persistently strong labor market data against inflation targets.
Jamie Patton, co-head of global rates at TCW, joined the discussion alongside Cabana. Together with host Scarlet Fu, the analysts examined the implications of the Fed's stance, including the potential for delayed rate normalization amid what they characterized as a resilient job market.
Citigroup’s revised timeline reflects the broader recalibration among market participants, who had earlier anticipated rate cuts in September. The later timeline signals that the Fed may require more time to confirm that inflation is moving sustainably toward its 2% goal before easing monetary policy.
Why This Matters
The revised interest rate cut timeline has direct implications for investors, borrowers, and savers. A delayed rate cut suggests higher borrowing costs will persist longer, affecting mortgage rates, credit card APRs, and business loans. Simultaneously, savings account yields remain elevated. For markets, this signals the Fed's confidence in economic resilience but also its commitment to fighting inflation, which could support the US dollar and influence equity valuations. Understanding when rate cuts may begin is crucial for portfolio allocation and financial planning decisions.
Timeline & Sources
Jun 17, 2026
WireFederal Reserve releases revised forecasts and leaves interest rates unchanged
Jun 19, 2026
WireBofA's Caban and TCW's Patton discuss employment and rate cut timing on Bloomberg