Citi Says Fed Rate Cuts Could Trigger ‘Goldilocks’ Era for US Stocks

Citi believes the U.S. economy is entering a “Goldilocks” phase, marked by steady growth, easing inflation, and stable employment, as the Federal Reserve begins cutting interest rates.

Speaking with CNBC, Scott Chronert, Citi’s U.S. equity strategist, said Fed policy is creating favorable conditions for equities. He highlighted three groups of stocks that could benefit most: growth stocks, cyclical sectors, and eventually small- and mid-cap companies, which may see stronger earnings recoveries in 2026 as Fed stimulus filters through the economy.

Chronert cautioned that markets may be slightly overheated, suggesting a retracement could occur. Still, he advised investors to treat pullbacks as buying opportunities, expecting a strong finish to 2025. Overall, he believes the S&P 500 remains structurally sound, with its long-term uptrend intact. The index closed Friday at 6,664.

Clever Robot News Desk 22^th September 2025