Forget The June Fed Pause: Citadel Warns 'Second-Round Effects' Will Force A September Rate Hike

Citadel Securities warns that despite the Fed's June pause on interest rates, underlying economic indicators suggest a more aggressive monetary policy ahead. The firm predicts 'second-round effects' from supply shocks, easy financial conditions, and a massive AI capex cycle will force rate hikes starting in September 2026, with consecutive hikes expected through March 2027. Markets are currently underpricing this hawkish pivot.