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Barclays Expects Fed to Raise Rates by 25 bps Each in Sep and Dec, Cut Rates Only by End-2027
2026-09-14 16:42:04 Barclays expects progress in easing inflation remains insufficient, and the Federal Reserve will raise interest rates by 25 bps this week, lifting the target range for the federal funds rate to 3.75% to 4.00%, in line with remarks made by Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium. Based on the bank's forecast for the upcoming August personal consumption expenditures inflation data, with core PCE rising 0.25% MoM, it believes the market will broadly support this rate hike. The bank expects the content of the Fed's statement to remain largely unchanged. Regarding the voting result, it expects at least one dovish dissenting vote from Governor Waller, who is inclined to keep interest rates unchanged. In addition, the possibility of a second dissenting vote cannot be ruled out. The bank maintained its forecast for the Fed's policy path unchanged. That is, the Federal Reserve will raise interest rates by 25 bps each in Sep and Dec. As inflation continues to ease further and moves closer to the target level, the bank expects the Federal Reserve to cut interest rates by 25 bps in Dec 2027. At the same time, it believes the risk of interest rates staying at elevated levels for a longer period has increased after this meeting. (ha/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |