citigroup

Citigroup Research stated in the U.S. Economic Weekly published on July 2 that the U.S. non-farm payroll data for June showed a significant weakening, strongly refuting the necessity for interest rate hikes. Citigroup believes that several factors that previously supported a hawkish stance, including rising oil prices, accelerated wage growth, and core PCE above target, have gradually faded, stating that "the reasons for rate hikes have disappeared."Data shows that in June, the U.S. non-farm payrolls added only 57,000 jobs, far below expectations, and the data for the previous two months was revised down by a total of 74,000 jobs. After revision, the average monthly growth of non-farm payrolls over the past three months has dropped to about 111,000, a significant decline from over 180,000 before the revision. The unemployment rate in June fell from 4.296% to 4.189%, but Citigroup believes this is mainly due to the labor participation rate dropping from 61.8% to 61.5%. If the participation rate remains unchanged, the unemployment rate would actually rise to above 4.5%.Regarding inflation, Citigroup stated that multiple factors are collectively suppressing price pressures. Oil prices have fallen back to pre-conflict levels, and July CPI and PCE data are expected to show a month-on-month decline; further slowing of housing rents will also drag down core CPI and core PCE. In addition, the revision of the core PCE methodology will adopt a more reasonable price adjustment approach for AI-related goods. Citigroup estimates that the year-on-year growth rate of the revised core PCE may be adjusted down by 20 to 30 basis points, which will be officially reflected in September.Citigroup maintains its baseline forecast, expecting the Federal Reserve to remain on hold at the FOMC meetings in July and September, with the first rate cut of 25 basis points occurring at the meeting on October 28, followed by another 25 basis points cut in December, bringing the federal funds rate range down to 3.0% to 3.25% by the end of the year. Citigroup also expects the Federal Reserve to cut rates three more times in 2027, with a terminal rate range of 2.75% to 3.0%.

According to a report by Reuters, the latest data released by Citi shows that driven by the demand for companies to cut AI spending, the market adoption rate of low-cost open-source models is rapidly increasing. In June of this year, the proportion of open-source model Tokens processed on the AI aggregation platform OpenRouter surged from 34% in January to 65%.Citi specifically pointed out in the report that the cost difference is a core factor driving this trend. The data shows that some Chinese open-source large models are continuously narrowing the performance gap with leading models in the United States, while their charges are as low as 18 cents per million Tokens, whereas the average charge for leading large models in the industry is about 4 dollars, resulting in a cost difference of over 20 times.

According to Jinshi reports, Citigroup expects the Federal Reserve to cut interest rates by 25 basis points in October, December 2026, and January 2027, previously predicting rate cuts in September, October, and December of this year.

According to Caixin, Citigroup has raised Micron Technology's target price from $840 to $1200.

According to the Wall Street Journal, Citigroup will launch a blockchain platform that allows wealthy and institutional clients to trade tokenized shares of private company equity, initially open only to overseas investors. Citigroup stated that it has negotiated with several large private companies for participation. As star private companies like SpaceX and Anthropic delay their IPOs, Wall Street's demand for private equity allocation is rising. Citigroup previously predicted that by 2030, the market size for tokenized securities could reach approximately $4 trillion, and has already piloted the tokenization of customer deposits for cross-border settlements through Token Services. Recently, it also joined a tokenized deposit network alliance led by JPMorgan, aiming to achieve year-round settlement of large client funds.

According to Jinshi reports, Citigroup strategists have raised the year-end target for the S&P 500 index from 7,700 points to 8,100 points.

According to The Wall Street Journal, several large banks in the United States plan to launch a tokenized deposit network next year, aimed at addressing the threat posed by stablecoins and cryptocurrency companies that have accelerated their penetration into traditional banking with the support of the Trump administration.The network will connect traditional payment rails with digital asset infrastructure, operated by the real-time payment network company Clearing House, which is jointly owned by several major banks, including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo.

According to CoinDesk, Citi analyst Alex Saunders stated in a recent report that the recent sale of Bitcoin by Strategy has caused market volatility, but the bigger issue is the lack of demand from new investors.The report pointed out that this sale by Strategy is part of a previously disclosed tax optimization plan and not a strategic shift. What is truly concerning is that the spot Bitcoin ETF has seen net outflows for 11 consecutive days, which is an important signal of weak investor adoption. Analysts estimate that ETF fund flows can explain about 45% of Bitcoin's weekly price fluctuations.In addition, the likelihood of the U.S. crypto market structure bill passing this year is decreasing, reducing potential positive catalysts. The bank believes that in the absence of regulatory progress and new capital inflows, Bitcoin market sentiment will remain subdued.

According to Jinshi reports, Citigroup strategists have stated that the excessive bullish positions in U.S. tech stocks are putting investors at risk of a market reversal.The Citigroup team pointed out that the ongoing enthusiasm for artificial intelligence has pushed bullish market bets to the limit, particularly making the Nasdaq 100 index vulnerable to shocks. Since hitting a bottom in late March, the S&P 500 index has risen by 20%, and the Nasdaq 100 index has soared by 33%.

In the latest report titled "Tokenization 2030: Wall Street On-Chain" released by Citigroup, it is estimated that the market size for tokenization of real-world assets (RWA) will grow from the current approximately $17 billion to $5.5 trillion by 2030. Depending on different adoption speed scenarios, the market size range may be between $2.7 trillion and $8.2 trillion.The report predicts that by 2030, approximately 10% of the U.S. short-term treasury market and 3% of the public equity market will be tokenized. At the same time, the expansion of the stablecoin market may bring about $1 trillion in new demand for U.S. treasuries; if 10% of U.S. retail investors shift to digital trading platforms, it is expected to create approximately $2.6 trillion in digital equity demand.Citigroup believes that as traditional financial assets gradually move on-chain, tokenization is expected to become an important bridge connecting Wall Street with blockchain infrastructure and drive the digital transformation of global capital markets.

According to Jinshi reports, sources say that OpenAI has discussed its upcoming IPO with Citigroup, JPMorgan Chase, and others. The sources indicate that Citigroup and JPMorgan Chase may join Goldman Sachs and Morgan Stanley in preparing for the listing.The sources state that discussions with Citigroup and JPMorgan Chase do not guarantee that they will ultimately participate in this IPO. Other investment banks may also eventually get involved.

According to CoinDesk, Citibank stated in its latest report that the progress of quantum computing technology is faster than the market expected, accelerating the potential security risks faced by cryptocurrencies and internet infrastructure, with Bitcoin being considered one of the assets with the "greatest risk exposure." The report points out that the ECDSA elliptic curve cryptography system currently used by Bitcoin could theoretically be cracked by sufficiently powerful quantum computers. In the future, attackers may be able to derive private keys from publicly disclosed public keys, allowing them to forge transactions and steal assets.Citibank analyst Alex Saunders stated that due to its relatively conservative governance mechanism and slow protocol upgrade speed, Bitcoin is more difficult to quickly complete quantum-resistant upgrades compared to PoS networks like Ethereum. The report estimates that there are currently about 6.5 million to 6.9 million BTC at potential quantum risk due to exposed public keys, accounting for about one-third of the current circulating supply, valued at approximately $450 billion at current prices. This includes some early P2PK addresses and wallets believed to belong to Satoshi Nakamoto.Citibank also warns of the "Harvest Now, Decrypt Later" risk, where attackers currently collect encrypted data and wait until future quantum computing power matures to decrypt it all at once.However, Citibank remains optimistic about the long-term adaptability of the cryptocurrency industry, believing that blockchain can still migrate through post-quantum cryptography and protocol reconstruction in the future. The report mentions that the BIP-360 and BIP-361 upgrade proposals currently being discussed by the Bitcoin community are worth paying attention to.

According to Jinshi reports, Citigroup's strategists have upgraded the rating of the U.S. stock market from "neutral" to "overweight," stating that the increasing uncertainty of the war situation makes investors more inclined to choose companies with higher quality and stronger defenses. At the same time, they downgraded the rating of emerging market stocks from "overweight" to "neutral," citing that these markets are vulnerable to energy shocks and the strengthening of the dollar.

According to Jinshi reports, Citigroup economists have preliminarily estimated that the month-on-month increase in March's core PCE, combined with today's CPI data, will be 0.3%.This level is higher than the 2% year-on-year target set by the Federal Reserve, but better than the 0.4% increase in February. The Citigroup team pointed out that they still need to incorporate PPI data to make a more accurate prediction of PCE.

According to Jinshi News, Citibank expects the Federal Reserve to cut interest rates in September, whereas the market previously anticipated a rate cut in June.

Citibank stated that the restrictions on the stablecoin reward mechanism in the U.S. CLARITY Act draft may pose temporary resistance to Circle (CRCL), but will not shake its long-term investment logic.Analysts pointed out that this policy is more likely to affect the pace of scale expansion rather than pose a fundamental threat. The bill aims to limit stablecoin earnings similar to deposit interest, but allows incentive mechanisms related to transactions or payments. Since Circle itself does not directly pay earnings to USDC holders but distributes reserve earnings to partners like Coinbase, its core revenue model will not be directly impacted. Citibank believes that the reduction in rewards may weaken users' short-term motivation to hold USDC, thereby affecting circulation scale and secondary market liquidity, but the key indicators for stablecoin adoption still lie in transaction and payment volumes, rather than circulation volume itself. Previously, due to policy uncertainty, Circle's stock price once fell by about 20%. However, institutions including Bernstein believe that the market may have misinterpreted the policy impact, with regulatory focus on limiting platforms that distribute earnings to users (such as Coinbase), rather than Circle's reserve earnings model.

According to market news, Citigroup has lowered its price forecasts for Bitcoin and Ethereum over the next 12 months, citing the stagnation of the "CLARITY Act" for the U.S. cryptocurrency market structure. The target price for Bitcoin has been reduced from $143,000 to $112,000, and for Ethereum from $4,304 to $3,175; the ETF demand forecasts have also been downgraded, with Bitcoin at $10 billion and Ethereum at $2.5 billion.Alex Sanders, head of Citigroup's research, pointed out that regulatory progress will affect the adoption of Bitcoin and capital inflows, but the likelihood of completing legislation within this year has significantly decreased.