Citi sticks to December rate-cut call, says India’s valuations still rich

Citi’s Drew Pettit says the Federal Reserve is still likely to cut rates in December, even though market odds have fallen. He said Citi’s “house view is we still expect to cut in December,” noting that the bank expects mild weakness in economic data but not recession signals.

Explaining how this shapes the equity view, Pettit said these would be “insurance cuts” meant to refine monetary policy, which should support global markets.

For India, he said earnings and fundamentals remain strong, but valuations have become full. “We want to see premium earnings growth, but we don’t want to see that fully reflected in valuations,” he said. Citi has moved India from overweight to market weight.

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