In their FOMC preview note Monday, Citi analysts told investors that the firm sees "residual hawkish risk at Jackson Hole in late August and beyond and increasing upside risk to inflation in 2024."
The Federal Reserve is widely expected to raise rates by 25bp on Wednesday.
"'Dots' from the Fed's June projections imply a subsequent 25bp hike delivered later this year – we think in November," the analysts wrote. "But Chair Powell will most likely give no strong guidance as to when, if at all, another rate hike is coming."
"Recently softer core inflation will be welcomed by Powell, but he is likely to want several more months of softer inflation data before confidently terminating the hiking cycle," they added. "With July core inflation likely soft again, dovish Fed rhetoric may predominate for at least another month."
The analysts also noted that they don't see the US economy headed toward a soft landing. Citi believes that upside inflation risks will reemerge in the fall after a summer of projected softer core inflation data.